Delaware Investments® Dividend and Income Fund, Inc. Announces Discount Management Programs

Rhea-AI Summary

Delaware Investments Dividend and Income Fund (DDF) announced its annual tender offer measurement period, potentially allowing for a tender offer if the fund averages more than a 10% discount. This aligns with the Fund’s commitment to liquidity for shareholders. Additionally, the Fund's recent share repurchase program resulted in the buyback of 77,000 shares valued at approximately $623,838. The Fund operates a managed distribution policy, targeting a 7.5% annual distribution rate, with monthly payouts intended to provide a consistent income stream for investors.

Positive

• Commencement of annual tender offer measurement period could enhance shareholder liquidity.
• Successful share repurchase of 77,000 shares valued at $623,838, reducing outstanding shares.
• Managed distribution policy targets a consistent annual distribution rate of 7.5%, potentially providing stable income for shareholders.

Negative

• Dependence on net investment income and capital gains may lead to uncertainty in distribution amounts.
• Utilizing return of capital in distributions could mislead shareholders on actual investment performance.

Today, Delaware Investments Dividend and Income Fund (the “Fund”), a New York Stock Exchange–listed closed-end fund trading under the symbol “DDF,” announced that the Fund’s Board approved the commencement of the Fund’s annual tender offer measurement period. If the Fund is trading at an average discount of more than 10% during the 12-week measurement period, the Board will consider conducting a tender offer to provide a periodic liquidity opportunity to shareholders. Additional information about the tender offer would be communicated to shareholders at a later date.

In addition, the Fund announced the results of its recent share repurchase program utilization. For the fiscal year ended Nov. 30, 2020, the Fund repurchased 77,000 common shares valued at $623,838 with an average discount per share of 10.17%.

The Fund has implemented a managed distribution policy. Under the policy, the Fund is managed with a goal of generating as much of the distribution as possible from net investment income and short-term capital gains. The balance of the distribution will then come from long-term capital gains to the extent permitted, and if necessary, a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. Even though the Fund may realize current year capital gains, such gains may be offset, in whole or in part, by the Fund’s capital loss carryovers from prior years.

Under the Fund’s managed distribution policy, the Fund makes monthly distributions to common shareholders at a targeted annual distribution rate of 7.5% of the Fund’s average net asset value (“NAV”) per share. The Fund will calculate the average NAV per share from the previous three full months immediately prior to the distribution based on the number of business days in those three months on which the NAV is calculated. The distribution will be calculated as 7.5% of the prior three month’s average NAV per share, divided by 12. The Fund will generally distribute amounts necessary to satisfy the Fund’s managed distribution policy and the requirements prescribed by excise tax rules and Subchapter M of the Internal Revenue Code. This distribution methodology is intended to provide shareholders with a consistent, but not guaranteed, income stream and a targeted annual distribution rate and is intended to narrow any discount between the market price and the NAV of the Fund’s common shares, but there is no assurance that the policy will be successful in doing so. The methodology for determining monthly distributions under the Fund’s managed distribution policy will be reviewed at least annually by the Fund’s Board of Trustees, and the Fund will continue to evaluate its distribution in light of ongoing market conditions.

You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's managed distribution policy. The amounts and sources of the Fund’s distributions to be reported will be estimates and will not be 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 you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

The Fund is a diversified closed-end fund. The primary investment objective is to seek high current income; capital appreciation is a secondary objective. The Fund seeks to achieve its objectives by investing, under normal circumstances, at least 65% of its total assets in income-generating equity securities, including dividend-paying common stocks, convertible securities, preferred stocks, and other equity-related securities, which may include up to 25% in real estate investment trusts (REITs) and real estate industry operating companies. Up to 35% of the Fund's total assets may be invested in nonconvertible debt securities consisting primarily of high-yield, high-risk corporate bonds. In addition, the Fund utilizes leveraging techniques in an attempt to obtain a higher return for the Fund. There is no assurance that the Fund will achieve its investment objectives.

About Macquarie Investment Management

Macquarie Investment Management, a member of Macquarie Group, includes the former Delaware Investments and is a global asset manager with offices throughout the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the team level in pursuit of opportunities that matter for clients. Macquarie Investment Management is supported by the resources of Macquarie Group (ASX: MQG; ADR: MQBKY), a global provider of asset management, investment, banking, financial and advisory services.

Advisory services are provided by Macquarie Investment Management Business Trust, a registered investment advisor. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. For more information about Delaware Funds^® by Macquarie, visit delawarefunds.com or call 800 523-1918.

Other than Macquarie Bank Limited (MBL), none of the entities referred to in this document are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL, a subsidiary of Macquarie Group Limited and an affiliate of Macquarie Investment Management. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.

© 2021 Macquarie Management Holdings, Inc.

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FAQ

What is the DDF Fund's tender offer measurement period?

The tender offer measurement period is the time frame during which the Fund will monitor its average discount; if it exceeds 10%, a tender offer may be considered.

How much did DDF repurchase under its recent share repurchase program?

The DDF Fund repurchased 77,000 common shares valued at approximately $623,838.

What is the targeted annual distribution rate for DDF?

The targeted annual distribution rate for DDF is set at 7.5% of the Fund's average net asset value (NAV) per share.

How does DDF manage its distributions?

DDF uses a managed distribution policy to generate income primarily from net investment income and short-term capital gains, supplemented by long-term gains and potential return of capital.

When can shareholders expect distributions from DDF?

DDF makes monthly distributions to shareholders based on its managed distribution policy.