The Gabelli Healthcare & Wellness Trust (GRX) is sinking -18.33% in pre-market trading today following the announcement of a cash distribution by the organization to common shareholders.
What is actually happening?
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As a diversified, closed-ended investment management company, Gabelli Healthcare (the Fund) has a total net asset value of $286 million and it has a primary investment objective of superior long-term capital growth. A division of GAMCO Investors, Inc. (NYSE: GBL), Gabelli Funds, LLC.manages the Fund.
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In a press release yesterday, Gabelli Healthcare has declared a cash distribution to shareholders of record on March 17, 2021, to pay $0.15 per share to its shareholders on March 24, 2021. An amount determined each quarter by the Board of Trustees will be distributed quarterly by the Fund.
Any changes to the amount of the quarterly distribution will be made at the Board of Trustees’ discretion. Taking into account the Fund’s financial market environment and its net asset value, the Board will monitor the distribution level of the Fund. The Fund’s distribution policy may be changed or terminated at any time, and there is no guarantee that the policy will continue. Shareholders should not consider the distribution rate the dividend yield or return on their investment in the Fund.
If the fund does not earn sufficient earnings arising from dividends, interest, and net reallocated capital gains, less expense, to cover its distribution payments, then the excess distributions would be considered a return of capital, said GRX. That would be considered only a return of a portion of a shareholder’s investment, and it is not taxed and is essentially a reduction of cost basis.