Wells Fargo Utilities and High Income Fund Announces Sources of Distribution
March 02 2020 - 04:56PM
Business Wire
The Wells Fargo Utilities and High Income Fund (NYSE American:
ERH) released information about the sources of today’s distribution
in a Notice provided to shareholders. The full text of the Notice
is available below and on the Wells Fargo Asset Management
website.
IMPORTANT NOTICE TO SHAREHOLDERS
This Notice provides information about the sources of the Fund’s
monthly distributions. You 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.
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’.
The amounts and sources of distributions reported in this Notice
are only estimates and are not being provided for tax reporting
purposes. Sources include net investment income (NII), short-term
capital gains (ST), long-term capital gains (LT) and paid in
capital. 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 following table provides an estimate of the Fund’s
distribution sources, reflecting the fiscal year-to-date cumulative
amount of distributions. The Fund attributes these estimates
equally to each regular distribution throughout the year.
Consequently, the estimated information as of the specified
month-end shown below is for the current distribution, and also
represents an updated estimate for all prior months in the
year.
Data as of 1/31/2020
Current Month
Fiscal Year to Date
Current Month
Estimated Sources of
Distribution
Estimated Sources of
Distribution
Estimated Percentages of
Distribution
Per Share
LT
ST
Paid in
Per Share
LT
ST
Paid in
LT
ST
Paid in
Distribution
NII
Gains
Gains
Capital
Distribution
NII
Gains
Gains
Capital
NII
Gains
Gains
Capital
ERH
0.07988
0.0619
0.01798
0.00000
0.00000
0.47058
0.19525
0.09746
0.00000
0.17787
77.50%
22.50%
0.00%
0.00%
The following table provides information regarding distributions
and total return performance over various time periods. This
information is intended to help you better understand whether
returns for the specified time periods were sufficient to meet
distributions.
Data as of 1/31/2020
Fiscal
Annualized
Cumulative
Fiscal YTD
Fiscal YTD
Quarterly
YTD
5-Year
Fiscal YTD
Return on
Dist Rate
Return on
Dist Rate
Dist
Dist
NAV
NAV
on NAV1
NAV
on NAV1
ERH
0.07988
0.47058
13.67
7.41%
6.85%
5.65%
2.53%
1 As a percentage of 1/31/2020 NAV
Additional Disclosures about the Wells Fargo Closed-End
Funds
The fund makes distribution in accordance with a managed
distribution plan that provides for the declaration of monthly
distributions to common shareholders of the fund at an annual
minimum fixed rate of 7.5%, based on the fund’s average monthly net
asset value (NAV) per share over the prior 12 months. Under the
managed distribution plan, distributions are sourced from income
and also may be sourced from paid-in capital and/or capital gains.
The fund’s distributions in any period may be more or less than the
net return earned by the fund on its investments and therefore
should not be used as a measure of performance or confused with
yield or income. Distributions in excess of fund returns will cause
the fund’s NAV to decline. Investors should not draw any
conclusions about the fund’s investment performance from the amount
of its distribution or from the terms of its managed distribution
plan.
The quoted distribution rate is a figure that uses the fund’s
previous distribution to calculate an annualized figure. The
distribution rate is calculated by annualizing the last
distribution and then dividing by the period-ending NAV or market
price. Special distributions, including special capital gains
distributions, are not included in the calculation.
The Wells Fargo Utilities and High Income Fund is a closed-end
equity and high-yield bond fund. The fund’s investment objective is
to seek a high level of current income and moderate capital growth
with an emphasis on providing tax-advantaged dividend income.
The final determination of the source of all dividend
distributions in the current year will be made after year-end. The
actual amounts and sources of the amounts for tax-reporting
purposes will depend upon a fund’s investment experience during the
remainder of the fiscal year and may be subject to change based on
tax regulations. Each fund will send shareholders a Form 1099-DIV
for the calendar year that will tell shareholders how to report
these distributions for federal income tax purposes.
For more information on Wells Fargo’s closed-end funds, please
visit our website.
The fund is a closed-end fund that is no longer engaged in
initial public offerings, and shares are available only through
broker-dealers on the secondary market. Unlike an open-end
mutual fund, a closed-end fund offers a fixed number of shares for
sale. After the initial public offering, shares are bought and sold
through broker-dealers in the secondary marketplace, and the market
price of the shares is determined by supply and demand, not by NAV,
and is often lower than the NAV. A closed-end fund is not required
to buy its shares back from investors upon request.
The use of leverage results in certain risks, including, among
others, the likelihood of greater volatility of net asset value and
the market price of common shares. High-yield, lower-rated bonds
may contain more risk due to the increased possibility of default.
Foreign investments may contain more risk due to the inherent risks
associated with changing political climates, foreign market
instability, and foreign currency fluctuations. Risks of
international investing are magnified in emerging or developing
markets. Funds that concentrate their investments in a single
industry or sector may face increased risk of price fluctuation due
to adverse developments within that industry or sector. Small- and
mid-cap securities may be subject to special risks associated with
narrower product lines and limited financial resources compared
with their large-cap counterparts. Derivatives involve additional
risks, including interest rate risk, credit risk, the risk of
improper valuation, and the risk of noncorrelation to the relevant
instruments they are designed to hedge or closely track. There are
numerous risks associated with transactions in options on
securities. Illiquid securities may be subject to wide fluctuations
in market value and may be difficult to sell. This closed-end fund
is no longer available as an initial public offering and is only
offered through broker-dealers on the secondary market. A
closed-end fund is not required to buy its shares back from
investors upon request.
Wells Fargo Asset Management (WFAM) is the trade name for
certain investment advisory/management firms owned by Wells Fargo
& Company. These firms include but are not limited to Wells
Capital Management Incorporated and Wells Fargo Funds Management,
LLC. Certain products managed by WFAM entities are distributed by
Wells Fargo Funds Distributor, LLC (a broker-dealer and Member
FINRA).
This material is for general informational and educational
purposes only and is NOT intended to provide investment advice or a
recommendation of any kind—including a recommendation for any
specific investment, strategy, or plan.
Some of the information contained herein may include
forward-looking statements about the expected investment activities
of the funds. These statements provide no assurance as to the
funds’ actual investment activities or results. Readers must make
their own assessment of the information contained herein and
consider such other factors as they may deem relevant to their
individual circumstances.
PAR-0220-04680
INVESTMENT PRODUCTS: NOT FDIC INSURED ● NO
BANK GUARANTEE ● MAY LOSE VALUE
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version on businesswire.com: https://www.businesswire.com/news/home/20200302006008/en/
Media Jeanette Foster, 415-264-1323
jeanette.d.foster@wellsfargo.com
Shareholder inquiries 1-800-730-6001
Financial advisor inquiries 1-888-877-9275
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