BrandywineGLOBAL - Global Income Opportunities Fund Inc. (BWG or “the Fund”; CUSIP: 10537L104) Announces Notification of Sources of Distributions
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Insights
The notification from BrandywineGLOBAL - Global Income Opportunities Fund Inc. regarding the sources of its distributions is a crucial piece of information for shareholders and potential investors. The distribution breakdown indicates a significant portion, precisely 81.53%, is categorized as a return of capital. This is noteworthy because it suggests that the fund's distributions are not solely from its earnings and profits, but also from the capital initially invested by the shareholders. Such a high return of capital percentage could imply that the fund's income and capital gains are not sufficient to cover the distributions, which might be a red flag for investors looking for sustainable income sources.
From a taxation perspective, the high return of capital component of the distribution has implications for shareholders. While return of capital is not immediately taxable, it reduces the cost basis of the investment, which can result in higher capital gains taxes upon the sale of shares. It is essential for investors to understand the tax consequences of these distributions, as they could affect the after-tax return of their investment. The absence of net realized short-term and long-term capital gains in the distribution could be seen as a positive from a tax standpoint, as these would typically be taxed at higher rates.
Investors often look for funds that provide consistent and sustainable distributions from income or capital gains. The information provided by BrandywineGLOBAL indicates a potential strategy of preserving capital gains and instead returning a portion of investors' capital. This strategy can be double-edged; on one hand, it may protect the fund's capital appreciation potential, but on the other hand, it raises questions about the fund's ability to generate income. Investors should assess the fund's overall performance, including its asset allocation and historical returns, to better understand the sustainability of its distributions in the context of their investment goals.
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 February 1, 2024, and for the fiscal year 2024 year-to-date are as follows:
Estimated Allocations for the January Monthly Distribution as of December 31, 2023:
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 December 31, 2023, 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 12/31/2023)1 |
Annualized Distribution Rate (as a percentage of NAV as of 12/31/2023)2 |
Cumulative Total Return (in relation to the change in NAV for the fiscal period through 12/31/2023)3 |
Cumulative Fiscal Year-To-Date Distribution Rate (as a percentage of NAV as of 12/31/2023)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 December 31, 2023. 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 December 31, 2023.
- Cumulative Total Return is the percentage change in the Fund’s NAV from October 31, 2023 through December 31, 2023, 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 December 31, 2023, as a percentage of the Fund’s NAV as of December 31, 2023.
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/20240201272728/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 the distribution to be paid on February 1, 2024?
What is the distribution per share for the January Monthly Distribution as of December 31, 2023?
What percentage of the distribution per share constitutes the return of capital for the January Monthly Distribution?
What are the cumulative estimated allocations fiscal year-to-date as of December 31, 2023?
