Ellsworth Growth and Income Fund Ltd. NAV Performance up 35% and Market Return up 31% in 2020 Declares Distribution of $0.13 Per Share

Rhea-AI Summary

Ellsworth Growth and Income Fund Ltd. (NYSE American: ECF) has declared a cash distribution of $0.13 per share, payable on March 24, 2021, to shareholders of record on March 17, 2021. This follows a total distribution of $1.33 per share in 2020, exceeding 5% of the Fund’s average market price of $0.57. The Fund aims for annual distributions of at least 5% of its trailing 12-month average price, subject to Board review and may include capital gains. Shareholders should note that portions of distributions may be treated as capital gains or return of capital.

Positive

• Declared a cash distribution of $0.13 per share for March 2021.
• Total distributions in 2020 were $1.33 per share, exceeding 5% of average market price.

Negative

• Distributions may not be guaranteed as they are subject to review and modification by the Board.
• If earnings are insufficient, distributions may be classified as a return of capital, not taxable but reducing cost basis.

The Board of Trustees of Ellsworth Growth and Income Fund Ltd. (NYSE American: ECF) (the “Fund”) declared a $0.13 per share cash distribution payable on March 24, 2021 to common shareholders of record on March 17, 2021. The distribution follows on the strength of the Fund’s returns in 2020.

The Fund intends to pay the greater of either an annual distribution of 5% of the Fund’s trailing 12-month average month-end market price or an amount that meets the minimum distribution requirement of the Internal Revenue Code for regulated investment companies. The total 2020 distributions paid to common shareholders was $1.33 per share, an amount greater than 5% of the Fund’s trailing 12-month average month-end market price which was $0.57.

Each quarter, the Board of Trustees reviews the amount of any potential distribution from the income, realized capital gain, or capital available. The Board of Trustees will continue to monitor the Fund’s distribution level, taking into consideration the Fund’s net asset value and the financial market environment. If necessary, the Fund pays an adjusting distribution in December, which includes any additional income and net realized capital gains in excess of the quarterly distributions. The Fund’s distribution policy is subject to modification or termination by the Board of Trustees at any time, and there can be no guarantee that the policy will continue. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

All or part of the distribution may be treated as long-term capital gain or qualified dividend income (or a combination of both) for individuals, each subject to the maximum federal income tax rate for long term capital gains, which is currently 20% in taxable accounts for individuals (or less depending on an individual’s tax bracket). In addition, certain U.S. shareholders who are individuals, estates or trusts and with income that exceeds certain thresholds will be required to pay a 3.8% Medicare surcharge on their "net investment income", which includes dividends received from the Fund and capital gains from the sale or other disposition of shares of the Fund.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and realized net capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a share-holder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis.

Long-term capital gains, qualified dividend income, investment company taxable income and return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. Based on the accounting records of the Fund currently available, the current distribution paid in 2021 to common shareholders with respect to the Fund’s fiscal year ending September 30, 2021 would include approximately 7% from net investment income and 93% from net capital gains on a book basis. This information does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website. The final determination of the sources of all distributions in 2021 will be made after year end and can vary from the quarterly estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2021 distributions in early 2022 via Form 1099-DIV.

Returns represent past performance and do not guarantee future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so, upon redemption, shares may be worth more or less than their original cost.

The Fund’s NAV per share will fluctuate with changes in the market value of the Fund’s portfolio securities. Stocks are subject to market, economic, and business risks that cause their prices to fluctuate. Investors acquire shares of the Fund on a securities exchange at market value, which fluctuates according to the dynamics of supply and demand. When Fund shares are sold, they may be worth more or less than their original cost. Consequently, you can lose money by investing in the Fund.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. To obtain the most recent month end performance information or for more information regarding the Fund’s distribution policy and other information about the Fund is available by calling 800-GABELLI (800-422-3554) or visiting www.gabelli.com.

About Ellsworth Growth and Income Fund

Ellsworth Growth and Income Fund Ltd. is a diversified, closed-end management investment company with $239 million in total net assets. ECF invests primarily in convertible securities and common stock with the objectives of providing income and the potential for capital appreciation, objectives the Fund considers to be relatively equal over the long-term due to the nature of the securities in which it invests. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL).

NYSE American: ECF
CUSIP – 289074106

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FAQ

What is the distribution amount for ECF shareholders in March 2021?

ECF shareholders will receive a distribution of $0.13 per share on March 24, 2021.

What was the total distribution amount paid in 2020 by ECF?

The total distribution paid to common shareholders in 2020 was $1.33 per share.

When is the record date for the ECF cash distribution?

The record date for the ECF cash distribution is March 17, 2021.

How does ECF determine its annual distribution?

ECF aims to pay the greater of 5% of its trailing 12-month average market price or the minimum IRS distribution requirement.

What tax implications are associated with ECF distributions?

Distributions may be treated as long-term capital gains or return of capital, affecting tax obligations for shareholders.