Clough Global Opportunities Fund Section 19(a) Notice
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Insights
The disclosure that the Clough Global Opportunities Fund is distributing 100% of its current distribution from return of capital is significant. This suggests the Fund is not generating enough income or capital gains to cover distributions, which can be a red flag for investors seeking sustainable income. The return of capital implies that the fund might be returning the investors' principal, which could lead to a reduction in the value of the fund's assets over time if the trend continues. Moreover, the annualized distribution rate as a percentage of NAV (Net Asset Value) at 10.02% is notably high, which could be attractive to income-focused investors but also raises questions about the sustainability of such payouts.
It's crucial to monitor the Fund's performance relative to its peers and the overall market to assess whether the high distribution rate is supported by superior investment strategies or if it's a potential warning of depletion of capital. The average annual total return on NAV over the past five years at 0.99% is relatively low, which might concern investors about the Fund's ability to generate returns in line with market expectations.
From a taxation perspective, the fact that the Clough Global Opportunities Fund's distributions may be classified as a return of capital is important for shareholders. Return of capital distributions are not taxed as income but instead reduce the investor's cost basis in the fund. This can defer tax liability until the fund shares are sold but can also result in a higher capital gains tax if the shares appreciate in value. Investors should be aware that the Form 1099-DIV they receive will ultimately determine the tax treatment of these distributions and should prepare for potential tax implications at the end of the fiscal year.
Assessing the Fund's distribution policy in the context of market conditions is essential. The cumulative total return on NAV of 13.98% for the fiscal year-to-date, compared to the cumulative distribution rate on NAV of 3.35%, indicates that the Fund's NAV has grown. However, this growth must be sustainable to support future distributions without resorting to the return of capital. It's also important to compare these figures with industry benchmarks to evaluate the Fund's competitive standing. Investors should consider whether the Fund's strategy aligns with their investment goals, especially in terms of risk tolerance and income needs. A comprehensive market analysis could provide insights into the Fund's investment approach and how it may perform under different economic scenarios.
Statement Pursuant to Section 19(a) of the Investment Company Act of 1940
DENVER, CO / ACCESSWIRE / February 29, 2024 / On February 29, 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 | 4.00 | % | |||||
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 | 0.18489 | 96.00 | % | |||||
Total (per common share) | 0.19260 | 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 1/31/2024) | |||
Annualized Distribution Rate as a Percentage of NAV^ | 10.02 | % | |
Cumulative Distribution Rate on NAV^+ | 3.35 | % | |
Cumulative Total Return on NAV* | 13.98 | % | |
Average Annual Total Return on NAV for the 5 Year Period Ending 1/31/2024** | 0.99 | % | |
Past performance is not indicative of future results.
^ Based on the Fund's NAV as of January 31, 2024.
+Cumulative distribution rate is based on distributions paid to date for the period November 1, 2023 through February 29, 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 January 31, 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 monthly distribution per share announced by Clough Global Opportunities Fund (GLO) on February 29, 2024?
What percentage of the total distribution amount per share was attributed to return of capital for the current distribution?
What were the percentages of net investment income and return of capital in the fiscal year-to-date cumulative distribution for Clough Global Opportunities Fund (GLO)?
What was the annualized distribution rate as a percentage of NAV for Clough Global Opportunities Fund (GLO) for the fiscal year to date?
What was the cumulative total return on NAV for Clough Global Opportunities Fund (GLO) for the period ending January 31, 2024?
