Clough Global Opportunities Fund Section 19(a) Notice
- None.
- None.
Insights
The distribution announcement by the Clough Global Opportunities Fund is a significant indicator of the fund's operational strategy and financial health. The declared distribution is entirely attributed to a return of capital, which can be a sign that the fund is not currently generating enough income or capital gains to support distributions. This could be an indication of a conservative investment approach or underperformance relative to the market.
From a financial perspective, a return of capital reduces the fund's assets under management, which in turn may affect the fund's ability to generate future income. Investors often seek funds that can sustain distributions through income or capital gains rather than returning capital. The fund's fiscal year-to-date cumulative distributions show a high percentage of return of capital, which may raise questions about the sustainability of its distribution policy.
The performance metrics, such as the cumulative total return on NAV, provide a mixed picture. While the short-term cumulative total return is robust, the five-year average annual total return is modest. This disparity suggests that the fund may have encountered challenges in maintaining consistent long-term performance. Investors should assess the fund's distribution strategy in the context of its overall performance and market conditions.
For investors, understanding the tax implications of distributions is essential. The fund's notice clarifies that the distribution amounts are estimates and not for tax reporting purposes. The actual amounts for tax purposes will depend on the fund's investment experience for the remaining fiscal year and are subject to tax regulations.
A return of capital distribution affects the tax basis of an investment. It is not taxed immediately as income, but it reduces the investor's cost basis in the fund, potentially leading to higher capital gains taxes when shares are sold. This can be advantageous in the short term by deferring taxes, but it may increase tax liabilities in the future.
Investors should anticipate receiving a Form 1099-DIV, which will categorize the distributions for tax reporting. It is important for shareholders to consult with tax professionals to understand how these distributions affect their individual tax situations, especially since the fund has distributed more than its income and net realized capital gains.
When evaluating an investment in a closed-end fund like the Clough Global Opportunities Fund, it's important to consider both performance metrics and distribution composition. The reliance on return of capital for distributions could be seen as a red flag for long-term growth potential. While it may provide immediate liquidity to shareholders, it does not come from the fund's earnings or capital gains, which could be suggestive of a lack of profitable investments or a temporary strategic maneuver.
The fund's NAV performance, particularly the 19.67% cumulative total return, appears strong, but this figure should be viewed in conjunction with the average annual total return over a five-year period, which is significantly lower. This indicates that the fund may have experienced a recent upswing in performance that may not be sustainable over the long term.
Investors should also consider the fund's market price relative to its NAV. The market price can fluctuate based on investor sentiment and market dynamics, which may not always align with the NAV. A shareholder's true gain or loss is ultimately determined by the market price when they decide to sell their shares.
Statement Pursuant to Section 19(a) of the Investment Company Act of 1940
DENVER, CO / ACCESSWIRE / March 28, 2024 / On March 28, 2024, the Clough Global Opportunities Fund (NYSE American:GLO) (the "Fund"), a closed-end fund, paid a monthly distribution on its common stock of
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) current and prior fiscal year net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source as a percentage of the total distribution amount. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
Current Distribution from: | ||||||||
| Per Share ($) | % | |||||||
Net Investment Income | 0.00000 | 0.00 | % | |||||
Net Realized Short-Term Capital Gain | 0.00000 | 0.00 | % | |||||
Net Realized Long-Term Capital Gain | 0.00000 | 0.00 | % | |||||
Return of Capital or other Capital Source | 0.04800 | 100.00 | % | |||||
Total (per common share) | 0.04800 | 100.00 | % | |||||
Fiscal Year-to-Date Cumulative Distributions from: | ||||||||
| Per Share ($) | % | |||||||
Net Investment Income | 0.00771 | 3.20 | % | |||||
Net Realized Short-Term Capital Gain | 0.00000 | 0.00 | % | |||||
Net Realized Long-Term Capital Gain | 0.00000 | 0.00 | % | |||||
Return of Capital or other Capital Source | 0.23289 | 96.80 | % | |||||
Total (per common share) | 0.24060 | 100.00 | % | |||||
The amounts and sources of distributions reported in this 19(a) Notice are only estimates and not 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 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.'
Presented below are return figures, based on the change in the Fund's Net Asset Value per share ("NAV"), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last business day of the month prior to distribution record date.
Fund Performance & Distribution Information
| Fiscal Year to Date (11/01/2023 through 2/29/2024) | |||||
Annualized Distribution Rate as a Percentage of NAV^ | 9.63 | % | |||
Cumulative Distribution Rate on NAV^+ | 4.02 | % | |||
Cumulative Total Return on NAV* | 19.67 | % | |||
Average Annual Total Return on NAV for the 5 Year Period Ending 2/29/2024** | 1.28 | % | |||
Past performance is not indicative of future results.
^ Based on the Fund's NAV as of February 29, 2024.
+Cumulative distribution rate is based on distributions paid to date for the period November 1, 2023 through
March 31, 2024.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions and that all rights in the Fund's rights offering were exercised, for the period November 1, 2023 through February 29, 2024.
**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and that all rights in the Fund's rights offering were exercised, as of the last business day of the month prior to the month of the current distribution record date.
While the NAV performance may be indicative of the Fund's investment performance, it does not measure the value of a shareholder's investment in the Fund. The value of a shareholder's investment in the Fund is determined by the Fund's market price, which is based on the supply and demand for the Fund's shares in the open market.
Shareholders 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.
Furthermore, the Board of Trustees reviews the amount of any potential distribution and the income, 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. The Fund's distribution policy is subject to modification by the Board of Trustees at any time. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.
Contact Info:
Website: https://www.cloughcefs.com/
Email: cloughclientinquiries@paralel.com
SOURCE: Clough Global Opportunities Fund | GLO
View the original press release on accesswire.com
FAQ
What was the amount of the monthly distribution paid by Clough Global Opportunities Fund (GLO) per share?
What percentage of the distribution was sourced from return of capital for Clough Global Opportunities Fund (GLO)?
What percentage of the fiscal year-to-date cumulative distributions for Clough Global Opportunities Fund (GLO) was from return of capital?
What was the cumulative total return on NAV for Clough Global Opportunities Fund (GLO) based on the fiscal year-to-date performance?
