BrandywineGLOBAL - Global Income Opportunities Fund Inc. (BWG or “the Fund”; CUSIP: 10537L104) Announces Notification of Sources of Distributions
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Insights
The announcement from BrandywineGLOBAL - Global Income Opportunities Fund Inc. regarding the sources of its distributions provides investors with a transparent breakdown of how the dividends are being generated. The reported distribution of $0.0800 per share with a significant portion, 61.70%, classified as a return of capital, indicates that a large part of the distribution is not sourced from the fund's income or capital gains but from the principal value of the investors' shares.
From a financial analysis perspective, the return of capital can be viewed as a red flag, as it may suggest that the fund's investments are not generating enough income or capital gains to sustain the distributions. This could potentially lead to a depletion of fund assets over time if the trend continues. Investors typically prefer distributions to be sourced from net investment income or realized capital gains, as these are indicative of the fund's performance and profitability.
Moreover, the absence of net realized short-term and long-term capital gains in the distribution suggests that the fund may not be realizing significant gains from its investments or may be offsetting gains with losses. This could be a point of concern for investors looking for growth in addition to income. The consistent 38.30% allocation to net investment income is a positive aspect, as it indicates a steady flow of income from the fund's investments.
From a taxation standpoint, the composition of the fund's distribution has implications for shareholders. The portion of the distribution categorized as return of capital is generally not taxable as income in the year it is received. Instead, it reduces the cost basis of the investment, potentially leading to higher capital gains taxes when the shares are sold. It's important for investors to be aware of these tax consequences when assessing the attractiveness of the fund's distributions.
While the return of capital can provide temporary tax relief, it may not be favorable in the long term if it results in higher capital gains taxes or if it signifies a lack of income-generating capacity within the fund. Shareholders should consult with tax professionals to understand the impact on their individual tax situations and to plan accordingly.
Notification of Sources of Distributions
Pursuant to Section 19(a) of the Investment Company Act of 1940
The Fund’s estimated sources of the distribution to be paid on April 1, 2024, and for the fiscal year 2024 year-to-date are as follows:
Estimated Allocations for the March Monthly Distribution as of February 29, 2024:
Distribution Per Share |
Net Investment Income |
Net Realized Short-Term Capital Gains |
Net Realized Long-Term Capital Gains |
Return of Capital |
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Cumulative Estimated Allocations fiscal year-to-date as of February 29, 2024, for the fiscal year ending October 31, 2024:
Distribution Per Share |
Net Investment Income |
Net Realized Short-Term Capital Gains |
Net Realized Long-Term Capital Gains |
Return of Capital |
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Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution or from the terms of the Plan. BWG estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of the BWG distribution to shareholders may be a return of capital. A return of capital may occur, for example, when some or all of the money that a shareholder invested in a Fund is paid back to them. A return of capital distribution does not necessarily reflect BWG’s investment performance and should not be confused with ‘yield’ or ‘income’. The amounts and sources of distributions reported herein are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will describe how to report the Fund’s distributions for federal income tax purposes.
Average Annual Total Return (in relation to the change in net asset value (NAV) for the 5-year period ended on 2/29/2024)1 |
Annualized Distribution Rate (as a percentage of NAV as of 2/29/2024)2 |
Cumulative Total Return (in relation to the change in NAV for the fiscal period through 2/29/2024)3 |
Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 2/29/2024)4 |
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Fund Performance and Distribution Rate Information:
- Average Annual Total Return in relation to NAV represents the compound average of the Annual NAV Total Returns of the Fund for the five-year period ended through February 29, 2024. Annual NAV Total Return is the percentage change in the Fund’s NAV over a year, assuming reinvestment of distributions paid.
- The Annualized Distribution Rate is the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV as of February 29, 2024.
- Cumulative Total Return is the percentage change in the Fund’s NAV from October 31, 2023 through February 29, 2024, assuming reinvestment of distributions paid.
- The Cumulative Fiscal Year-To-Date Distribution Rate is the dollar value of distributions for the fiscal period October 31, 2023 through February 29, 2024, as a percentage of the Fund’s NAV as of February 29, 2024.
This Fund has a managed distribution policy that seeks to deliver the Fund’s long-term total return potential through regular monthly distributions declared at a fixed rate per common share. Distributions may be paid in part or in full from net investment income, realized capital gains and by returning capital, or a combination thereof. Shareholders should note, however, that if a Fund’s aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. A return of capital is not taxable; rather it reduces a shareholder’s tax basis in his or her shares of the Fund. The Board of Directors of the Fund may terminate or suspend the managed distribution policy at any time, which could have an adverse effect on the market price of the Fund’s shares.
For further information on BrandywineGLOBAL - Global Income Opportunities Fund Inc., please visit our web site at: www.franklintempleton.com/investments/options/closed-end-funds
Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Funds.
Category: Distribution Related
Source: Franklin Resources, Inc.
Source: Legg Mason Closed End Funds
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401708296/en/
Investor Contact: Fund Investor Services 1-888-777-0102
Source: Franklin Resources, Inc. and Legg Mason Closed End Funds
FAQ
What is the ticker symbol for BrandywineGLOBAL - Global Income Opportunities Fund Inc.?
What are the estimated sources of distributions for the Fund's upcoming payment on April 1, 2024?
What are the cumulative estimated allocations for the fiscal year-to-date as of February 29, 2024?
