Delaware Enhanced Global Dividend and Income Fund Announces Discount Management Programs

Rhea-AI Summary

Delaware Enhanced Global Dividend and Income Fund (DEX) announced an annual tender offer measurement period, considering a tender offer if trading discounts exceed 10%. The Fund repurchased 108,837 shares in FY 2020, valued at $1,010,719, averaging an 8.60% discount. It follows a managed distribution policy aiming for a 6.5% annual distribution rate, primarily from net investment income and short-term capital gains. The Fund invests in dividend-paying securities globally and employs various income strategies. No guarantees are made for achieving investment objectives.

Positive

• Commencement of annual tender offer measurement may enhance liquidity for shareholders.
• Share repurchase program demonstrates commitment to shareholder value.

Negative

• Managed distribution policy may involve return of capital, potentially impacting perceived income.
• No assurance of achieving targeted annual distribution rate or investment objectives.

Today, Delaware Enhanced Global Dividend and Income Fund (the “Fund”), a New York Stock Exchange–listed closed-end fund trading under the symbol “DEX,” 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 108,837 common shares valued at $1,010,719 with an average discount per share of 8.60%.

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 6.5% of the Fund’s average 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 6.5% 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's primary investment objective is to seek current income, with a secondary objective of capital appreciation. The Fund invests globally in dividend-paying or income-generating securities across multiple asset classes, including but not limited to: equity securities of large, well-established companies; securities issued by real estate companies (including real estate investment trusts and real estate industry operating companies); debt securities (such as government bonds; investment grade and high risk, high yield corporate bonds; and convertible bonds); and emerging market securities. The Fund also uses enhanced income strategies by engaging in dividend capture trading; option overwriting; and realization of gains on the sale of securities, dividend growth, and currency forwards. There is no assurance that the Fund will achieve its investment objectives.

Under normal market conditions, the Fund will invest: (1) at most 60% of its net assets in securities of U.S. issuers; and (2) at least 40% of its net assets in securities of non-U.S. issuers, unless market conditions are not deemed favorable by the Manager, in which case, the Fund would invest at least 30% of its net assets in securities of non-U.S. issuers; and (3) the Fund may invest up to 25% of its net assets in securities issued by real estate companies (including real estate investment trusts and real estate industry operating companies). In addition, the Fund utilizes leveraging techniques in an attempt to obtain higher return for the Fund.

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 Delaware Enhanced Global Dividend and Income Fund's current tender offer status?

The Fund has commenced its annual tender offer measurement period and may consider a tender offer if discounts exceed 10%.

What were the results of the DEX share repurchase program?

In FY 2020, DEX repurchased 108,837 shares valued at $1,010,719 with an average discount of 8.60%.

What is the annual distribution rate for DEX?

The Fund aims for a targeted annual distribution rate of 6.5% based on the average NAV per share.

How does DEX manage its distribution policy?

The Fund's policy focuses on generating distributions primarily from net investment income and may include a return of capital.

Is there a guarantee for DEX's investment performance?

No, there is no assurance that the Fund will achieve its investment objectives.