Gabelli Global Utility & Income Trust Continues Monthly Distributions, Declares Distributions of $0.10 Per Share

Rhea-AI Summary

Gabelli Global Utility & Income Trust (GLU) has announced the continuation of its fixed monthly cash distributions policy. The Board of Trustees declared distributions of $0.10 per share for April, May, and June 2025. This aligns with the Fund's initial distribution policy of paying a minimum annual distribution of 6% of the initial public offering price of $20.00 per share.

The 2025 distributions are expected to comprise approximately 8% from net investment income, 51% from net capital gains, and 41% would be deemed a return of capital on a book basis. The Board regularly reviews potential distributions from income, realized capital gains, or available capital, and may adjust December distributions to meet Internal Revenue Code requirements for regulated investment companies.

Positive

• Consistent monthly distribution of $0.10 per share maintained
• 51% of distributions come from net capital gains
• 8% of distributions derived from net investment income

Negative

• 41% of distributions represent return of capital, indicating insufficient earnings to cover distributions
• Distribution policy subject to modification without guarantee of continuation

Insights

Financial Analyst

The continuation of Gabelli Global Utility & Income Trust's monthly distribution policy reveals several critical aspects that warrant investor attention. The distribution composition is particularly telling - with 51% derived from net capital gains and a substantial 41% classified as return of capital, while only 8% comes from net investment income.

The high proportion of return of capital in the distribution structure is a important consideration. While this component provides tax advantages by being generally non-taxable, it effectively represents a return of investors' original investment, reducing their cost basis. This structure suggests the fund may be struggling to generate sufficient organic income to support its distribution policy naturally.

The substantial reliance on capital gains (51%) to fund distributions indicates potential sustainability concerns. In challenging market conditions, capital gains can be more difficult to generate consistently, which could put pressure on the fund's ability to maintain its current distribution level. The relatively small portion (8%) coming from net investment income - the most sustainable source of distributions - further underscores this consideration.

The fund's commitment to maintaining its initial 6% distribution policy based on the IPO price of $20.00 creates a fixed obligation that may become increasingly challenging to meet if market conditions deteriorate. While the quarterly review process by the Board of Trustees provides some flexibility, the high return of capital component suggests the current distribution rate may be stretching the fund's natural income-generating capabilities.

For tax-conscious investors, the distribution composition offers both opportunities and complexities. The significant capital gains component means a substantial portion of distributions will be subject to long-term capital gains rates (maximum 20% for individuals), while the return of capital portion offers immediate tax advantages but reduces future capital appreciation potential through cost basis reduction.

RYE, N.Y., Feb. 13, 2025 (GLOBE NEWSWIRE) -- The Board of Trustees of The Gabelli Global Utility & Income Trust (NYSE American: GLU) (the “Fund”) approved the continuation of its policy of paying fixed monthly cash distributions. The Board of Trustees declared cash distributions of $0.10 per share for each of April, May, and June 2025.

Distribution Month	Record Date	Payable Date	Distribution Per Share
April	April 15, 2025	April 23, 2025	$0.10
May	May 15, 2025	May 22, 2025	$0.10
June	June 13, 2025	June 23, 2025	$0.10

Under the Fund’s initial distribution policy, the Fund has paid a minimum annual distribution of 6% of the initial public offering price of $20.00 per share (a distribution of $0.10 per share each month).

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 will pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the monthly distributions for that year to satisfy the minimum distribution requirements of the Internal Revenue Code for regulated investment companies. The Fund’s distribution policy is subject to modification 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 whose income 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 shareholder’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, each of the distributions paid to common shareholders in 2025 would include approximately 8% from net investment income, 51% from net capital gains and 41% would be deemed a return of capital on a book basis. This 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 (www.gabelli.com). The final determination of the sources of all distributions in 2025 will be made after year end and can vary from the monthly 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 2025 distributions in early 2026 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

Adam Tokar
(914) 457-1079

About The Gabelli Global Utility & Income Trust
The Gabelli Global Utility & Income Trust is a diversified, closed-end management investment company with $119 million in total net assets whose primary investment objective is to seek a consistent level of after-tax total return for its investors with an emphasis on tax-advantaged dividend income under current tax law. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE American – GLU
CUSIP – 36242L105

Investor Relations Contact:
Adam Tokar
(914) 457-1079
atokar@gabelli.com

FAQ

What is GLU's monthly distribution amount for April-June 2025?

GLU will distribute $0.10 per share monthly for April, May, and June 2025.

How is GLU's 2025 distribution composed percentage-wise?

GLU's 2025 distributions comprise approximately 8% from net investment income, 51% from net capital gains, and 41% as return of capital.

What is GLU's minimum annual distribution policy?

GLU maintains a minimum annual distribution of 6% of the initial public offering price of $20.00 per share, equating to $0.10 per share monthly.

When will GLU shareholders receive their tax documentation for 2025 distributions?

GLU shareholders will receive Form 1099-DIV with tax treatment information for all 2025 distributions in early 2026.

What is the tax treatment for GLU's distributions?

GLU's distributions may be treated as long-term capital gain, qualified dividend income, or return of capital, subject to a maximum 20% federal tax rate plus 3.8% Medicare surcharge for qualifying individuals.