The Board of Trustees of The GDL Fund (NYSE:GDL) (the Fund) declared a $0.10 per share cash distribution payable on June 21, 2019 to common shareholders of record on June 14, 2019.
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 Funds distribution level, taking into consideration the Funds net asset value and the financial market environment. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.
The Fund makes annual distributions of its realized net long-term capital gains and quarterly cash distributions of all or a portion of its investment company taxable income (which includes net investment income and net realized short-term capital gains) to common shareholders. A portion of the distribution may be a return of capital. Various factors will affect the level of the Funds income, such as its asset mix and use of merger arbitrage strategies. To permit the Fund to maintain more stable distributions, the Fund may distribute more than the entire amount of income earned in a particular period. Because the Funds current quarterly distributions are subject to modification by the Board of Trustees at any time and the Funds income will fluctuate, there can be no assurance that the Fund will pay distributions at a particular rate or frequency.
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 Funds earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholders original investment, it is generally not taxable and would be treated as a reduction in the shareholders cost basis.
Short-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 2019 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 2019 will be made after year end and can vary from the quarterly estimates. Shareholders should not draw any conclusions about the Funds 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 2019 distributions in early 2020 via Form 1099-DIV.
Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. More information regarding the Funds distribution policy and other information about the Fund is available by calling 800-GABELLI (800-422-3554) or visiting www.gabelli.com.
The GDL Fund is a diversified, closed-end management investment company with $315 million in total net assets whose investment objective is to achieve absolute returns in various market conditions without excessive risk of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (NYSE:GBL).