Wells Fargo Utilities and High Income Fund Announces Sources of Distribution
The Wells Fargo Utilities and High Income Fund (NYSE: ERH) has issued a notification regarding the sources of its recent monthly distributions. Notably, the fund has distributed more than its income and net realized capital gains, indicating that some distributions may represent a return of capital. The estimates for distribution sources, which include net investment income and capital gains, are provided to shareholders, though these figures are subject to change based on tax regulations. Investors are cautioned not to interpret distribution amounts as a reflection of investment performance.
- The Fund adheres to a managed distribution plan, providing monthly distributions at a minimum fixed rate of 7.0%.
- Estimated sources of distributions include net investment income and capital gains, which could potentially offer returns to shareholders.
- A portion of the distribution may be a return of capital, which could indicate that the fund is returning invested capital rather than generating sufficient income.
- Distributions exceeding fund returns may lead to a decline in the fund’s net asset value (NAV).
IMPORTANT NOTICE TO SHAREHOLDERS
This Notice provides information about the sources of the Fund’s monthly distributions. 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 Plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be 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.”
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. Sources include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT) and paid-in capital. 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 following table provides an estimate of the Fund’s distribution sources, reflecting the fiscal year-to-date cumulative amount of distributions. The Fund attributes these estimates equally to each regular distribution throughout the year. Consequently, the estimated information as of the specified month-end shown below is for the current distribution, and also represents an updated estimate for all prior months in the year.
Data as of |
|||||||||||||||
Current Month | Fiscal Year to Date | Current Month | |||||||||||||
Estimated Sources of Distribution | Estimated Sources of Distribution | Estimated Percentages of Distribution | |||||||||||||
Per Share
|
NII |
LT Gains |
ST Gains |
Paid in
|
Per Share
|
NII |
LT Gains |
ST Gains |
Paid in
|
NII |
LT Gains |
ST Gains |
Paid in
|
||
ERH (FYE 8/31) | 0.07314 |
0.03628 |
0.00511 |
0 |
0.03175 |
0.07314 |
0.03628 |
0.00511 |
0 |
0.03175 |
|
|
|
|
The following table provides information regarding distributions and total return performance over various time periods. This information is intended to help you better understand whether returns for the specified time periods were sufficient to meet distributions.
Data as of |
||||||||
|
|
Annualized |
Cumulative |
|||||
|
|
5-Year |
Fiscal YTD |
Fiscal YTD |
Fiscal YTD |
|||
Fiscal YTD Dist |
NAV |
Return on
|
|
Return on
|
|
|||
ERH (FYE 8/31) | 0.85608 |
13.31 |
|
|
|
|
||
1 As a percentage of 8/31 NAV |
Additional Disclosures about the
The fund makes distributions in accordance with a managed distribution plan that provides for the declaration of monthly distributions to common shareholders of the fund at an annual minimum fixed rate of
The quoted distribution rate is a figure that uses the fund’s previous distribution to calculate an annualized figure. The distribution rate is calculated by annualizing the last distribution and then dividing by the period-ending NAV or market price. Special distributions, including special capital gains distributions, are not included in the calculation.
The
The final determination of the source of all dividend distributions in the current year will be made after year-end. The actual amounts and sources of the amounts for tax-reporting purposes will depend upon a fund’s investment experience during the remainder of the fiscal year and may be subject to change based on tax regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
For more information on Wells Fargo’s closed-end funds, please visit our website.
This closed-end fund is no longer available as an initial public offering and is only offered through broker-dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request. Shares of the fund may trade at either a premium or discount relative to the fund’s net asset value, and there can be no assurance that any discount will decrease. The values of, and/or the income generated by, securities held by the fund may decline due to general market conditions or other factors, including those directly involving the issuers of such securities. Equity securities fluctuate in value in response to factors specific to the issuer of the security. Debt securities are subject to credit risk and interest rate risk, and high yield securities and unrated securities of similar credit quality have a much greater risk of default and their values tend to be more volatile than higher-rated securities with similar maturities. The fund is also subject to risks associated with any concentration of its investments in the utility sector. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. The fund is leveraged through a revolving credit facility and also may incur leverage by issuing preferred shares in the future. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of common shares. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Derivatives involve additional risks, including interest rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track.
This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.
Some of the information contained herein may include forward-looking statements about the expected investment activities of the funds. These statements provide no assurance as to the funds’ actual investment activities or results. Readers must make their own assessment of the information contained herein and consider such other factors as they may deem relevant to their individual circumstances.
PAR-0921-01099
INVESTMENT PRODUCTS: NOT FDIC INSURED ● NO BANK GUARANTEE ● MAY LOSE VALUE
WF-CF
View source version on businesswire.com: https://www.businesswire.com/news/home/20211001005732/en/
Media
jeanette.d.foster@wellsfargo.com
Shareholder inquiries
1-800-730-6001
Financial advisor inquiries
1-888-877-9275
Source:
FAQ
What is the Wells Fargo Utilities and High Income Fund's distribution rate?
Why might a portion of the distribution be a return of capital for ERH?
How does the fund's managed distribution plan affect its NAV?
Where can I find the details of ERH's distributions?