Gabelli Healthcare & WellnessRx Trust Declares First Quarter Distribution of $0.15 Per Share

Rhea-AI Summary

The Gabelli Healthcare & WellnessRx Trust (GRX) declares a $0.15 per share cash distribution payable on March 21, 2024, to common shareholders of record on March 14, 2024. The Fund aims to pay quarterly distributions determined by the Board of Trustees, with potential adjusting distributions in December based on additional income and net realized capital gains. Shareholders should be aware of tax implications and the possibility of return of capital if distributions exceed earnings.

Insights

Financial Analyst

The announcement of the Gabelli Healthcare & WellnessRx Trust's quarterly cash distribution of $0.15 per share is a fundamental piece of information for shareholders and potential investors. It directly affects the yield on their investment and can influence the attractiveness of the Fund in the market. The distribution policy, being subject to change, indicates a level of flexibility in the Fund's approach to capital management, which could be seen as a response to fluctuating market conditions or changes in the Fund's performance.

It is important for investors to note the distinction between distribution rate and dividend yield or total return. The distribution includes not only income but also potentially realized capital gains, which can affect the tax implications for the receiver. The mention of a potential return of capital is significant as it suggests that not all distributions are derived from the Fund's earnings, which could indicate a depletion of assets if continued over the long term.

Tax Specialist

For investors, understanding the tax implications of distributions is crucial. The classification of the distribution as long-term capital gain, qualified dividend income, or return of capital has different tax consequences. The Fund's distribution could be subject to a maximum federal income tax rate for long-term capital gains, currently at 20% and for certain high-income individuals, an additional 3.8% Medicare surcharge on net investment income. The distinction between regular income and return of capital is particularly noteworthy as the latter may not be taxable and affects the cost basis of the investment, potentially reducing the capital gains tax upon sale of the shares.

Moreover, the Fund's note that the current distribution is deemed 100% from paid-in capital on a book basis is an essential detail for tax planning. It implies that the distribution may not come from the Fund's earnings but rather from the capital shareholders originally invested, which may have different tax treatments and could impact the shareholder's long-term investment strategy.

Market Research Analyst

The Gabelli Healthcare & WellnessRx Trust's distribution policy and its adaptability to the financial market environment can be a signal to the market about the Fund's performance and outlook. The ability to pay out distributions consistently is often seen as a sign of stability and financial health, which can be appealing to investors. However, the reliance on paid-in capital for distributions, rather than earnings, could raise concerns about the sustainability of such distributions in the absence of sufficient earnings.

Additionally, the Board's statement that the distribution policy is subject to modification or termination at any time could introduce uncertainty for investors. It is crucial for market analysts to monitor the Fund's net asset value and the financial market environment, as these factors could influence future distributions and, consequently, the Fund's attractiveness to both current and potential investors.

RYE, N.Y., Feb. 14, 2024 (GLOBE NEWSWIRE) -- The Board of Trustees of The Gabelli Healthcare & Wellness^Rx Trust (NYSE:GRX) (the “Fund”) declared a $0.15 per share cash distribution payable on March 21, 2024 to common shareholders of record on March 14, 2024.

The Fund intends to pay a quarterly distribution of an amount determined each quarter by the Board of Trustees. In addition to the quarterly distributions, and in accordance with the minimum distribution requirements of the Internal Revenue Code for regulated investment companies, the Fund may pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the quarterly distributions for that year.

Each quarter, the Board of Trustees reviews the amount of any potential distribution and 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 current financial market environment. 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 up 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, the current distribution paid to common shareholders in 2024 would be deemed 100% from paid-in 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 2024 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 2024 distributions in early 2025 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:

Bethany Uhlein
(914) 921-5546

About The Gabelli Healthcare & Wellness^Rx Trust
The Gabelli Healthcare & Wellness^Rx Trust is a diversified, closed-end management investment company with $242 million in total net assets whose primary investment objective is long-term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE: GRX
CUSIP – 36246K103

THE GABELLI HEALTHCARE & WELLNESSRx TRUST
Investor Relations Contact:
Bethany Uhlein
914.921.5546
buhlein@gabelli.com

FAQ

What is the cash distribution per share declared by The Gabelli Healthcare & WellnessRx Trust (GRX)?

The Fund declared a $0.15 per share cash distribution payable on March 21, 2024.

When will the cash distribution be paid to common shareholders of The Gabelli Healthcare & WellnessRx Trust (GRX)?

The cash distribution will be paid on March 21, 2024, to common shareholders of record on March 14, 2024.

How are the quarterly distributions determined by The Gabelli Healthcare & WellnessRx Trust (GRX)?

The quarterly distributions are determined each quarter by the Board of Trustees based on the Fund's income, realized capital gain, and available capital.

What are the tax implications for shareholders of The Gabelli Healthcare & WellnessRx Trust (GRX) regarding distributions?

Shareholders should be aware that distributions exceeding the Fund's earnings may be deemed a return of capital, which is generally not taxable and reduces the shareholder's cost basis.

Where can shareholders find updated information on the components of distributions by The Gabelli Healthcare & WellnessRx Trust (GRX)?

Shareholders can find updated information on the components of distributions on the Fund's website (www.gabelli.com) and in notices accompanying the distributions.