Voya Equity Closed End Fund Declares Distribution

Rhea-AI Summary

Voya Investment Management, a division of Voya Financial, Inc. (NYSE: VOYA), has announced the monthly distribution for its closed-end fund, Voya Global Equity Dividend and Premium Opportunity Fund (NYSE: IGD). The distribution of $0.040 per share will be paid on March 15, 2024, to shareholders of record on March 4, 2024, with an ex-dividend date of March 1, 2024. The Fund aims to provide regular monthly distributions based on its past and projected performance, with distributions varying depending on market conditions. The tax treatment of distributions may vary, with an estimated 6% of each distribution for the current fiscal year characterized as net investment income and 94% as return of capital.

Insights

Financial Analyst

The announcement of the monthly distribution for Voya Global Equity Dividend and Premium Opportunity Fund (IGD) signifies a routine capital return to shareholders, which is crucial to the attractiveness of closed-end funds (CEFs) as income-generating investments. The distribution amount is a key factor in the fund's yield calculation, which can impact the fund's share price and demand. The disclosed ratio of net investment income to return of capital is particularly noteworthy. A higher proportion of the distribution coming from return of capital, as indicated by the 94%, may suggest that the fund's underlying investments are not generating sufficient income. This could be a red flag for income-focused investors, as it may imply that future distributions could decrease if capital gains are not realized to support these payments.

Moreover, the tax implications of the distributions, which hinge on the tax character of the fund's option strategy and underlying equity portfolio, are significant for shareholders. The complexity of the tax treatment can affect the after-tax return for investors, which is a critical consideration when evaluating the attractiveness of such an investment. The mention of potential changes in tax characterization also underscores the need for investors to stay informed about the tax consequences of their investments.

Market Research Analyst

The market dynamics of closed-end funds like IGD are influenced by the distribution rates in comparison to similar investment vehicles. The fund's distribution strategy, clarity of investment strategy and the market's perception of future returns play pivotal roles in determining the fund's market price relative to its net asset value (NAV). The fact that CEF shares often trade at a discount to NAV is an important consideration for potential investors and can be an indicator of the market's confidence in the fund's management and investment strategy. It is essential to monitor the demand for shares, which is influenced by these factors, as it can lead to significant price fluctuations independent of the fund's performance.

Investment risk, including the potential loss of principal, is an inherent aspect of investing in funds like IGD. The fund's investment strategy, risk profile and the volatile nature of the markets it invests in must be carefully weighed against an investor's risk tolerance and investment objectives. The announcement serves as a reminder for investors to reassess their investment in light of the fund's current performance and distribution characteristics.

Tax Expert

The tax treatment of the fund's distributions is a critical aspect for investors, especially given the complexity of tax laws regarding investment income and capital gains. The potential for a portion of the return of capital to be taxed as ordinary income under certain conditions adds another layer of complexity to the investment decision. Investors must be cognizant of the fact that the final tax characteristics of the distributions will only be confirmed after the fiscal year's end, necessitating a proactive approach to tax planning. The fund's reliance on its options strategy to generate returns can lead to varied tax outcomes, which emphasizes the importance of understanding the implications of the fund's investment activities on personal tax liabilities.

SCOTTSDALE, Ariz.--(BUSINESS WIRE)-- Voya Investment Management, the asset management business of Voya Financial, Inc. (NYSE: VOYA), announced today the monthly distribution on the common shares of one of its closed-end funds.

With respect to the Fund, the distribution will be paid on March 15, 2024, to shareholders of record on March 4, 2024. The ex-dividend date is March 1, 2024. The distribution per share for the Fund is as follows:

Fund	Distribution Per Share
Voya Global Equity Dividend and Premium Opportunity Fund (NYSE: IGD)	$0.040

IGD intends to make regular monthly distributions based on the past and projected performance of the Fund. The amount of a Fund’s distribution may vary, depending on a number of factors. As portfolio and market conditions change, the rate of distributions on the common shares may change. There can be no assurance that a Fund will be able to declare a distribution in each period. Past performance is no guarantee of future results.

The tax treatment and characterization of the Fund’s distributions may vary significantly from time to time depending on the net investment income of the Fund and whether the Fund has realized gains or losses from its options strategy versus gain or loss realizations in the equity securities in the portfolio. The Fund’s distributions will normally reflect past and projected net investment income, and may include income from dividends and interest, capital gains and/or a return of capital.

The portion of the Fund's monthly distribution is estimated to come from the Fund's option strategy, for tax purposes, may be treated as a combination of long-term and short-term capital gains, and/or a return of capital. The tax character of the Fund's option strategy is largely determined by movements in, and gain and loss realizations in, the underlying equity portfolio. Under certain conditions, federal tax regulations may also cause some or all of the return of capital to be taxed as ordinary income. The final tax characteristics of the distributions cannot be determined with certainty until after the end of the calendar year and will be reported to shareholders at that time.

IGD estimates that for the current fiscal year as of January 31, 2024, approximately 6% of each distribution is characterized as net investment income and 94% is characterized as return of capital.

Shares of closed-end funds often trade at a discount from their net asset value. The market price of Fund shares may vary from net asset value based on factors affecting the supply and demand for shares, such as Fund distribution rates relative to similar investments, investors' expectations for future distribution changes, the clarity of the Fund's investment strategy and future return expectations, and investors' confidence in the underlying markets in which the Fund invests. Fund shares are subject to investment risk, including possible loss of principal invested. No Fund is a complete investment program and you may lose money investing in a Fund. An investment in a Fund may not be appropriate for all investors. Before investing, prospective investors should carefully consider the Fund's investment objective, risks, charges and expenses.

Certain statements made on behalf of the Fund in this release are forward-looking statements. The Fund’s actual future results may differ significantly from those anticipated in any forward-looking statements due to numerous factors, including but not limited to a decline in value in equity markets in general or the Fund’s investments specifically. Neither the Fund nor Voya Investment Management undertake any responsibility to update publicly or revise any forward-looking statement.

This information should not be used as a basis for legal and/or tax advice. In any specific case, the parties involved should seek the guidance and advice of their own legal and tax counsel.

About Voya® Investment Management

Voya Investment Management manages approximately $322 billion as of December 31, 2023 in assets across public and private fixed income, equities, multi-asset solutions and alternative strategies for institutions, financial intermediaries and individual investors, drawing on a 50-year legacy of active investing and the expertise of 300+ investment professionals. Voya IM has cultivated a culture grounded in a commitment to understanding and anticipating clients’ needs, producing strong investment performance, and embedding diversity, equity and inclusion in its business.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240215889328/en/

SHAREHOLDER INQUIRIES: Shareholder Services at (800) 992-0180; voyainvestments.com

CONTACT: Kris Kagel, (800) 992-0180

Source: Voya Financial, Inc.

FAQ

When will the distribution be paid for Voya Global Equity Dividend and Premium Opportunity Fund (IGD)?

The distribution will be paid on March 15, 2024.

What is the distribution per share for IGD?

The distribution per share for IGD is $0.040.

What is the ex-dividend date for IGD?

The ex-dividend date for IGD is March 1, 2024.

How are the Fund's distributions determined?

The Fund's distributions are based on past and projected performance, with the amount varying depending on market conditions.

What is the estimated breakdown of the current fiscal year's distribution for IGD?

Approximately 6% of each distribution is characterized as net investment income, and 94% is characterized as return of capital.

What risks are associated with investing in closed-end funds like IGD?

Fund shares are subject to investment risk, including possible loss of principal invested. No Fund is a complete investment program, and investors may lose money investing in a Fund.