Gabelli Utility Trust : Continues Monthly Distributions, Declaring Distributions of $0.05 Per Share
November 17, 2017 at 11:25 am
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The Board of Trustees of The Gabelli Utility Trust (NYSE:GUT) (the
“Fund”) approved the continuation of its policy of paying fixed monthly
cash distributions. The Board of Trustees declared cash distributions of
$0.05 per share for each of January, February, and March 2018.
The distribution for January 2018 will be payable on January 24, 2018 to
common shareholders of record on January 17, 2018.
The distribution for February 2018 will be payable on February 21, 2018
to common shareholders of record on February 13, 2018.
The distribution for March 2018 will be payable on March 22, 2018 to
common shareholders of record on March 15, 2018.
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. The Gabelli Utility
Trust has paid a distribution to shareholders every month since October
1999.
The Fund’s shares are currently trading at a premium to net asset
value. The Board of Trustees believes that the premium at which
the Fund shares trade relative to net asset value is not likely to be
sustainable. Shareholders participating in the Fund’s dividend
reinvestment plan should note that at the current market price, the
reinvestment of distributions occurs at a premium to net asset value.
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, which is currently
20% in taxable accounts for individuals (or zero 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 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
is treated as a reduction in the shareholder’s cost basis.
Long-term capital gains, qualified dividend income, ordinary 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 2017 would include
approximately 5% from net investment income, 2% from net capital gains
and 93% 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 2017 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
shareholders with taxable accounts will receive written notification
regarding the components and tax treatment for all 2017 distributions in
early 2018 via Form 1099-DIV.
Investors should carefully consider the investment objectives, risks,
charges, and expenses of the Fund before investing. More
information regarding the Fund’s distribution policy and other
information about the Fund is available by calling 800-GABELLI
(800-422-3554) or visiting www.gabelli.com.
The Gabelli Utility Trust is a diversified, closed-end management
investment company with $344 million in total net assets whose primary
investment objective is to seek long-term growth of capital and income
by investing primarily in utility companies involved in the generation
and distribution of electricity, gas, and water. The Fund is managed by
Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL).
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The Gabelli Utility Trust (the Fund) is a diversified closed-end management investment company. The Fund's primary investment objective is long term growth of capital and income. The Fund invests at least 80% of its net assets (plus borrowings made for investment purposes), under normal market conditions, in common stocks and other securities of foreign and domestic companies involved in providing products, services, or equipment for the generation or distribution of electricity, gas and water, and telecommunications services or infrastructure operations. Under normal circumstances, the Fund invests in securities of issuers located in countries other than the United States and may invest in such foreign securities without limitation. The Fund's portfolio includes equipment and supplies, transportation, diversified industrial, oil, electronics, environmental services, financial services, automotive and specialty chemicals. The Fund's investment adviser is Gabelli Funds, LLC.