BrandywineGLOBAL - Global Income Opportunities Fund Inc. (BWG or “the Fund”; CUSIP: 10537L104) Announces Notification of Sources of Distributions
BrandywineGLOBAL - Global Income Opportunities Fund (BWG) announced the sources of its distributions for the fiscal year 2024. The estimated distribution per share to be paid on June 3, 2024, is $0.0800, with 54.79% from net investment income and 45.21% as a return of capital. Year-to-date cumulative distributions stand at $0.4800 per share. The average annual total return over the past five years is 0.81%, with an annualized distribution rate of 10.65%. Shareholders should note that a portion of the distributions may be a return of capital, which reflects a return of the shareholders' original investment rather than income or gains. The Fund’s performance metrics include a cumulative total return of 13.18% and a year-to-date distribution rate of 5.33%.
- June 3, 2024, distribution per share is $0.0800.
- Year-to-date cumulative distributions per share are $0.4800.
- 54.79% of the distribution is funded by net investment income.
- Annualized distribution rate is 10.65%.
- Cumulative total return for the fiscal period through April 30, 2024, is 13.18%.
- Managed distribution policy aims for regular monthly distributions.
- 45.21% of the distribution is a return of capital.
- Average annual total return over the past 5 years is only 0.81%.
- Distributions exceeding income and gains suggest reliance on returning original capital.
- The managed distribution policy could be terminated or suspended, potentially affecting share prices.
Insights
In this distribution notification from BrandywineGLOBAL, a critical point for investors is the breakdown of the $0.0800 per share distribution.
Notably, 54.79% of the distribution is from net investment income, while 45.21% is a return of capital (ROC). The ROC essentially means that investors are getting back a portion of their original investment, which does not indicate fund performance. Over the fiscal year to date, the fund similarly sourced its distributions—with over 54% from income and 45% from ROC.
Implications: A high ROC percentage suggests the fund is not generating sufficient returns from investments to cover distributions. This situation may necessitate an inspection of the fund's earnings potential and asset quality. The distribution rate of 10.65% seems attractive, but it's important to understand that it includes a significant ROC component, which could erode the fund's NAV over time.
Performance Metrics: With an average annual total return of only 0.81% over five years, the fund's earnings are limited. Additionally, the 13.18% cumulative total return for the fiscal year suggests some recovery or gains, yet it’s essential to see if these returns can be sustained moving forward.
For retail investors, evaluate if the high yield compensates for the erosion of the principal and whether the fund's strategy aligns with your investment goals.
Investors should be cautious about the tax implications of this distribution. The return of capital (ROC) is not taxable immediately but reduces the investor's tax basis in the fund. A lower tax basis means higher potential capital gains taxes when shares are sold.
This press release emphasizes that the amounts and sources of distributions are estimates and not for tax reporting purposes. Therefore, investors need to wait for the Form 1099-DIV for accurate tax reporting. The distinction between ordinary income, long-term and short-term gains will impact the final tax burden.
Understanding these details helps in effective tax planning and avoids surprises during tax season. It's advisable to keep track of the ROC amounts received to anticipate the changes in your tax basis and 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 June 3, 2024, and for the fiscal year 2024 year-to-date are as follows:
Estimated Allocations for the May Monthly Distribution as of April 30, 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 April 30, 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 4/30/2024)1 |
Annualized Distribution Rate (as a percentage of NAV as of 4/30/2024)2 |
Cumulative Total Return (in relation to the change in NAV for the fiscal period through 4/30/2024)3 |
Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 4/30/2024)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 April 30, 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 April 30, 2024.
- Cumulative Total Return is the percentage change in the Fund’s NAV from October 31, 2023 through April 30, 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 April 30, 2024, as a percentage of the Fund’s NAV as of April 30, 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/20240603197599/en/
Investor: Fund Investor Services 1-888-777-0102
Source: Franklin Resources, Inc. and Legg Mason Closed End Funds
FAQ
What is the distribution per share for BWG on June 3, 2024?
What percentage of BWG's June 3, 2024, distribution is from net investment income?
What is BWG's cumulative distribution per share for fiscal year 2024?
What portion of BWG's distribution is considered a return of capital?
What is BWG's average annual total return over the past five years?
What is BWG's annualized distribution rate as of April 30, 2024?
How does BWG's managed distribution policy affect shareholders?
What is the cumulative total return for BWG for the fiscal period through April 30, 2024?
What is BWG's cumulative fiscal year-to-date distribution rate?
What are the risks associated with BWG's managed distribution policy?
