NEUBERGER BERMAN NEXT GENERATION CONNECTIVITY FUND ANNOUNCES MONTHLY DISTRIBUTION

Rhea-AI Summary

Neuberger Berman Next Generation Connectivity Fund Inc. (NYSE: NBXG) has declared a distribution of $0.10 per share of common stock, payable on January 31, 2024, with a record date of January 16, 2024, and an ex-date of January 12, 2024. The Fund anticipates maintaining regular monthly distributions of $0.10 per share, subject to market conditions. However, the ability to sustain this distribution rate depends on various factors, including income from investments, availability of capital gains, and Fund fees and expenses.

Insights

Financial Analyst

The declaration of a $0.10 per share distribution by Neuberger Berman Next Generation Connectivity Fund Inc. signals a commitment to providing shareholders with a steady stream of income. This is particularly noteworthy for income-focused investors who prioritize dividend consistency and yield when selecting investment options. The Fund's level distribution policy, while aiming to deliver regular monthly distributions, is contingent upon various factors such as investment income stability, capital gains realization and management of fees and expenses.

The ability to maintain or adjust the distribution rate is a critical aspect for the Fund's performance and attractiveness. A stable or increasing rate can reflect positively on the Fund's investment strategy and portfolio management, potentially leading to an uptick in investor confidence and demand for shares. Conversely, a reduction in distribution could signal underlying issues with asset performance or a strategic shift in portfolio management, possibly impacting the stock price negatively.

Investors should be aware that distributions are not solely reliant on net investment income and may include capital gains or return of capital. The latter, while maintaining the distribution amount, could imply that the Fund is not generating enough income and is returning a portion of the investment capital to shareholders, which might not be sustainable in the long term. This practice can affect the Fund's net asset value over time and should be monitored closely.

Tax Advisor

The announcement includes a note on compliance with Section 19 of the Investment Company Act of 1940, highlighting the Fund's obligation to inform shareholders when distributions include more than just net investment income. This transparency is crucial for shareholders' tax planning, as the tax treatment of distributions can vary significantly depending on whether they are classified as net investment income, capital gains, or return of capital.

A return of capital, for instance, is not taxed immediately as income but reduces the cost basis of the investment, potentially leading to higher capital gains taxes when shares are sold. Shareholders should consider the tax implications of these distributions and adjust their investment strategies accordingly. The Fund's commitment to providing estimates of the composition of distributions for informational purposes helps investors anticipate potential tax liabilities and underscores the importance of tax efficiency in investment decisions.

Market Research Analyst

The distribution strategy of Neuberger Berman Next Generation Connectivity Fund provides insights into the broader trends within the investment fund industry. Funds that offer regular and predictable distributions are often favored in market conditions where investors seek stability, especially in uncertain economic times or when market volatility is high. The Fund's distribution policy may be interpreted as a competitive advantage, potentially attracting a specific investor demographic looking for regular income.

However, the reliance on not just income but also capital gains and return of capital to maintain distribution levels can be indicative of the current market environment where yields from traditional income-generating assets are potentially lower. This strategy may also reflect the Fund's asset allocation, which could be geared towards growth-oriented investments with variable income streams. Monitoring peer funds' distribution policies and market reactions can provide a broader context for evaluating the Fund's decisions and their potential impact on investor sentiment and stock market performance.

NEW YORK, Dec. 29, 2023 /PRNewswire/ -- Neuberger Berman Next Generation Connectivity Fund Inc. (NYSE: NBXG) (the "Fund") has announced a distribution declaration of $0.10 per share of common stock. The distribution announced today is payable on January 31, 2024, has a record date of January 16, 2024, and has an ex-date of January 12, 2024.

Under its level distribution policy, the Fund anticipates that it will make regular monthly distributions, subject to market conditions, of $0.10 per share of common stock, unless further action is taken to determine another amount. The Fund's ability to maintain its current distribution rate will depend on a number of factors, including the amount and stability of income received from its investments, availability of capital gains, and the level of other Fund fees and expenses. There is no assurance that the Fund will always be able to pay a distribution of any particular amount or that a distribution will consist of only net investment income.

Due to an effort to maintain a stable distribution amount, the distribution announced today, as well as future distributions, may consist of net investment income, net realized capital gains and return of capital. In compliance with Section 19 of the Investment Company Act of 1940, as amended, a notice would be provided for any distribution that does not consist solely of net investment income. The notice would be for informational purposes and not for tax reporting purposes, and would disclose, among other things, estimated portions of the distribution, if any, consisting of net investment income, capital gains and return of capital. The final determination of the source and tax characteristics of all distributions paid in 2024 will be made after the end of the year.

About Neuberger Berman

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity, real estate and hedge funds—on behalf of institutions, advisors and individual investors globally. Neuberger Berman's investment philosophy is founded on active management, engaged ownership and fundamental research, including industry-leading research into material environmental, social and governance factors. Neuberger Berman is a PRI Leader, a designation awarded to fewer than 1% of investment firms. With offices in 26 countries, the firm's diverse team has over 2,750 professionals. For nine consecutive years, Neuberger Berman has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). The firm manages $439 billion in client assets as of September 30, 2023. For more information, please visit our website at www.nb.com.

Statements made in this release that look forward in time involve risks and uncertainties. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Fund's performance, a general downturn in the economy, competition from other closed end investment companies, changes in government policy or regulation, inability of the Fund's investment adviser to attract or retain key employees, inability of the Fund to implement its investment strategy, inability of the Fund to manage rapid expansion and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

Contact:
Neuberger Berman Investment Advisers LLC
Investor Information
(877) 461-1899

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SOURCE Neuberger Berman

FAQ

What is the distribution amount declared by Neuberger Berman Next Generation Connectivity Fund Inc. (NYSE: NBXG)?

The Fund has declared a distribution of $0.10 per share of common stock.

When is the distribution payable and what are the important dates related to it?

The distribution is payable on January 31, 2024, with a record date of January 16, 2024, and an ex-date of January 12, 2024.

What factors determine the Fund's ability to maintain its current distribution rate?

The Fund's ability to maintain its distribution rate depends on factors such as income from investments, availability of capital gains, and Fund fees and expenses.

What may the distribution consist of and what compliance measures are being taken?

The distribution may consist of net investment income, net realized capital gains, and return of capital. Compliance measures are being taken in accordance with Section 19 of the Investment Company Act of 1940 to provide notice for any distribution that does not consist solely of net investment income.

When will the final determination of the source and tax characteristics of the distributions paid in 2024 be made?

The final determination will be made after the end of the year.