The Reaves Utility Income Fund (NYSE Amex: UTG) announced today the next three monthly dividends, at a rate of $0.125 per common share per month, unchanged from the per share rate paid for the previous quarter. The dividend represents an annualized yield of 5.83% based on the current market price. As of December 19, 2011, the Fund’s market price was $25.75 per share and its net asset value was $23.21 per share.
The Fund also declared today a special distribution of $0.332 per share. The special distribution is being paid in addition to the Fund’s regular monthly dividend to allow the Fund to meet its 2011 distribution requirement for federal excise tax purposes. Of the $0.332 per share $0.287 represents short-term capital gain and $0.045 represents long-term capital gain. For calendar 2011 the total of distributions per share was $1.812 or 7.04% of the closing price December 19, 2011.
The Fund has formally implemented the 19b-1 exemption received from the Securities & Exchange Commission in 2009. A portion of each distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain and return of capital. The final determination of the source of these distributions, including the percentage of qualified dividend income, will be made after the Fund’s year end.
Ronald J. Sorenson, Portfolio Manager of the Fund, Chief Executive Officer and Chief Investment Officer of Reaves Asset Management stated that the Fund’s capital gains, both realized and unrealized, are consistently monitored with a view toward managing the amount and the nature of capital gains available for distribution to shareholders. Selection of securities for the portfolio takes into consideration total return potential in addition to the current yield.Not less than eighty percent of the Fund’s assets will continue to be invested in the securities of utility companies. As a policy, the Fund continues to strive to provide a high level of after-tax income and total return consisting primarily of tax-advantaged dividend income and capital appreciation.
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