On September 28, 2018, Delaware Investments Dividend and Income Fund, Inc. (NYSE: DDF) (the Fund), a closed-end fund, paid a monthly distribution on its common stock of $0.0968 per share to shareholders of record at the close of business on September 14, 2018.
The following table sets forth the estimated amount of the sources of distribution for purposes of Section 19 of the Investment Company Act of 1940, as amended, and the related rules adopted thereunder. The Fund estimates the following percentages, of the total distribution amount per share, attributable to (i) net investment income, (ii) net realized short-term capital gain, (iii) net realized long-term capital gain and (iv) return of capital or other capital source. These percentages are disclosed for the current distribution as well as the fiscal year-to-date cumulative distribution amount per share for the Fund.
|Current Distribution from:|
Per Share ($)
|Net Investment Income||0.0263||27.2%|
|Net Realized Short-Term Capital Gain||0.0000||0.0%|
|Net Realized Long-Term Capital Gain||0.0705||72.8%|
|Return of Capital or other Capital Source|
|Total (per common share)||0.0968||100.00%|
|Fiscal Year-to-Date Cumulative|
Per Share ($)
|Net Investment Income||0.2541||23.2%|
|Net Realized Short-Term Capital Gain||0.0254||2.3%|
|Net Realized Long-Term Capital Gain||0.7789||71.1%|
|Return of Capital or other Capital Source|
|Total (per common share)||1.0952||100.00%|
Shareholders should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution policy. The amounts and sources of distributions reported in this 19(a) Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds 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.
Subject to the foregoing, the Fund estimates (as of the date hereof) that it has distributed more than its income and net realized capital gains for the fiscal year ending November 30, 2018; 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 Funds investment performance and should not be confused with ˜yield or ˜income.
Presented below are return figures, based on the change in the Funds Net Asset Value per share (NAV), compared to the annualized distribution rate for this current distribution as a percentage of the NAV on the last business day of the month prior to distribution record date.
Fund Performance & Distribution Information
|Fiscal Year to Date (12/01/2017 through 8/31/2018)|
|Annualized Distribution Rate as a Percentage of NAV^||9.79%|
|Cumulative Distribution Rate on NAV^||9.23%|
|Cumulative Total Return on NAV*||7.14%|
|Average Annual Total Return on NAV for the 5 Year Period Ending 8/31/18**||11.61%|
^ Based on the Funds NAV as of August 31, 2018.
*Cumulative fiscal year-to-date return is based on the change in NAV including distributions paid and assuming reinvestment of these distributions for the period December 1, 2017 through August 31, 2018.
**The 5 year average annual total return is based on change in NAV including distributions paid and assuming reinvestment of these distributions and is through the last business day of the month prior to the month of the current distribution record date.
While the NAV performance may be indicative of the Funds investment performance, it does not measure the value of a shareholders investment in the Fund. The value of a shareholders investment in the Fund is determined by the Funds market price, which is based on the supply and demand for the Funds shares in the open market.
The Funds primary investment objective is to seek high current income; capital appreciation is a secondary objective. The Fund seeks to achieve its objectives by investing, under normal circumstances, at least 65% of its total assets in income-generating equity securities, including dividend-paying common stocks, convertible securities, preferred stocks, and other equity-related securities, which may include up to 25% in real estate investment trusts (REITs) and real estate industry operating companies. Up to 35% of the Fund’s total assets may be invested in nonconvertible debt securities consisting primarily of high-yield, high-risk corporate bonds. In addition, the Fund utilizes leveraging techniques in an attempt to obtain a higher return for the Fund. There is no assurance that the Fund will achieve its investment objectives.
The Fund has implemented a managed distribution policy. Under the policy, the Fund is managed with a goal of generating as much of the distribution as possible from net investment income and short-term capital gains. The balance of the distribution will then come from long-term capital gains to the extent permitted, and if necessary, a return of capital. Even though the Fund may realize current year capital gains, such gains may be offset, in whole or in part, by the Funds capital loss carryovers from prior years.
Currently under the Funds managed distribution policy, the Fund makes monthly distributions to common shareholders at a targeted annual distribution rate of 10% of the Funds average net asset value (NAV) per share. The Fund will calculate the average NAV per share from the previous three full months immediately prior to the distribution based on the number of business days in those three months on which the NAV is calculated. The distribution will be calculated as 10% of the prior three months average NAV per share, divided by 12. The Fund will generally distribute amounts necessary to satisfy the Funds managed distribution policy and the requirements prescribed by excise tax rules and Subchapter M of the Internal Revenue Code. This distribution methodology is intended to provide shareholders with a consistent, but not guaranteed, income stream and a targeted annual distribution rate and is intended to narrow the discount between the market price and the NAV of the Funds common shares, but there is no assurance that the policy will be successful in doing so. The methodology for determining monthly distributions under the Funds managed distribution policy will be reviewed at least annually by the Funds Board of Directors, and the Fund will continue to evaluate its distribution in light of ongoing market conditions.
The payment of dividend distributions in accordance with the managed distribution policy may result in a decrease in the Funds net assets. A decrease in the Funds net assets may cause an increase in the Funds annual operating expenses and a decrease in the Funds market price per share to the extent the market price correlates closely to the Funds net asset value per share. The managed distribution policy may also negatively affect the Funds investment activities to the extent that the Fund is required to hold larger cash positions than it typically would hold or to the extent that the Fund must liquidate securities that it would not have sold, for the purpose of paying the dividend distribution. The managed distribution policy may, under certain circumstances, cause the amounts of taxable distributions to exceed the amount minimally required to be distributed under the tax rules, such excess will be taxable as ordinary income to the extent loss carry forwards reduce the required amount of capital gains distributions in that year. Investors should consult their tax advisor regarding federal, state, and local tax considerations that may be applicable in their particular circumstances.
About Macquarie Investment Management
Macquarie Investment Management, a member of Macquarie Group, includes the former Delaware Investments and is a global asset manager with offices throughout the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the team level in pursuit of opportunities that matter for clients. Macquarie Investment Management is supported by the resources of Macquarie Group (ASX: MQG; ADR: MQBKY), a global provider of asset management, investment, banking, financial and advisory services.
Advisory services are provided by Macquarie Investment Management Business Trust, a registered investment advisor. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. For more information about Delaware FundsSM by Macquarie, visit delawarefunds.com or call 800 523-1918.
Other than Macquarie Bank Limited (MBL), none of the entities referred to in this document are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL, a subsidiary of Macquarie Group Limited and an affiliate of Macquarie Investment Management. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
Macquarie Investment Management
Jessica Fitzgerald, 215-255-1336