Global High Income Fund Inc. — Distribution Characteristics for September 2015
Global High Income Fund Inc. (the "Fund") (NYSE: GHI), a non-diversified, closed-end management investment company seeking high current income and secondarily, capital appreciation through investments primarily in securities of emerging market debt issuers, today announced its distribution characteristics for the month of September 2015.
The following notice was sent to shareholders today:
Global High Income Fund Inc.
c/o UBS Global Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, NY 10019
The purpose of this document is to provide you with information that is required to be sent to you as well as additional information that may be of interest to at least some investors.
On September 14, 2015, the Fund's Board of Directors declared a regular monthly distribution of $0.0686 per share. This distribution is payable on September 30, 2015 to shareholders of record as of September 24, 2015. The ex-distribution date was September 22, 2015.
The Fund adopted a managed distribution policy ("Policy") in December 1999. Pursuant to the Policy as in effect from June 2014 through May 2015, the Fund made regular monthly distributions at an annualized rate equal to 6% of the Fund's net asset value, determined as of the last day on which the New York Stock Exchange is open for trading during the first week of that month. Pursuant to the Policy with respect to distributions paid from June 2012 through the monthly distribution for May 2014, the annualized rate had been 7%. Consistent with the Policy, the monthly distribution in any given month may have been comprised of a combination of net investment income, capital gains, and/or a return of capital. The Fund's Board receives recommendations from UBS Global Asset Management (Americas) Inc. ("UBS Global AM"), the Fund's investment advisor, periodically, and no less frequently than annually will reassess the annualized percentage of net assets at which the Fund's monthly distributions will be made.
As announced in a press release issued on May 20, 2015, the annualized rate of the Fund's monthly distribution was increased from 6% to 9%, effective with the June 2015 monthly distribution. The Fund's Board intends to maintain the 9% annualized distribution rate until at least June 2016 absent unforeseen circumstances. However, the Fund's Board reserves its right to change that distribution rate or to change or terminate the Policy at any time without prior notice to Fund shareholders should the Board determine that to do so would be in the best interests of the Fund in light of unforeseen, changed circumstances from those that prevailed when the 9% annualized distribution rate was adopted in May 2015. Any such change or termination may have an adverse effect on the market price for the Fund's shares and would be announced in a press release.
The Board believed that the increased rate was appropriate based upon the recommendation of UBS Global AM, and in light of its ongoing consideration of efforts to reduce the discount to NAV at which the Fund's shares recently had traded as of May 2015. Historically, UBS Global AM and the Board had sought to maintain distribution rates that were more closely aligned with the Fund's expected earnings. In recent years, however, a general decline in prevailing bond yields and narrowing of spreads have reduced the Fund's earnings levels, which resulted in reductions of the monthly distribution rate, which may have contributed to the discount at which the Fund's shares have traded. UBS Global AM believes that increasing the annualized distribution rate may help to reduce the Fund's trading discount.
In approving the increased distribution rate, the Fund's Board has effectively de-linked the Fund's managed distribution payments from the level of anticipated Fund earnings. To the extent that the aggregate amount distributed by the Fund under the Policy exceeds its current and accumulated earnings and profits, which is an expected result of the increase that began in June 2015, the amount of that excess would constitute a return of capital or net realized capital gains for tax purposes. A return of capital may occur, for example, when some or all of the money that shareholders invested in the Fund is deemed to be paid back to them. A return of capital distribution does not reflect the Fund's investment performance and should not be confused with "yield" or "income." Of course, if the Fund's earnings and profits in any fiscal year should exceed the aggregate amount distributed under the Policy, no return of capital to the Fund's shareholders would occur, and the Fund would make an additional distribution in the amount of that excess near the end of the fiscal year.
During the current fiscal year which ends on October 31, 2015, the Fund has made eleven (11) regular monthly distributions from November 1, 2014 to September 30, 2015, which in the aggregate equal $0.6535 per share. The sources of the regular distributions paid during the month and current fiscal year are estimated as follows:
|Estimated source of regular monthly distributions|
|Distributions||Net investment income||Net realized short-term capital gains||Net realized long-term capital gains||Return of capital|
|Current month||$0.0686||$0.0351 (51%)||$0 (0%)||$0 (0%)||$0.0335 (49%)|
|YTD*||$0.6535||$0.5109 (78%)||$0 (0%)||$0 (0%)||$0.1426 (22%)|
* Fiscal year-to-date.
The Fund periodically issues notices to shareholders and press releases estimating the source characteristics of its monthly distributions. The amounts and sources reported in these materials are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for accounting and tax reporting purposes will depend upon the Fund's investment experience during its entire fiscal year and may be subject to retroactive changes based on tax regulations. The Fund sends shareholders a Form 1099-DIV (or a financial intermediary should provide a shareholder with similar information) for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.
If you chose to receive your distributions in cash, a check should have been sent to you or a credit should have been made on your financial intermediary or Fund account statement. If you chose to reinvest your distributions, that statement (or a subsequent one) should indicate the additional shares purchased for your account in full and fractional shares of the Fund's common stock.
You should not draw any conclusions about the investment performance of the Fund's portfolio from the amount of the monthly distribution or from the terms of the Fund's Policy.
If you would like to change your distribution option, please write or call your broker or, if you hold shares directly with the Fund, the Fund's distribution disbursing agent, BNY Mellon Investment Servicing, at 1-800-331-1710. For more information about the Fund, please contact: UBS Global Asset Management Closed-End Funds Desk, 888-793 8637.
Please find below additional information regarding the Fund's performance. Please note that this information is primarily based on the Fund's net asset value based performance, not its market price based performance. Market price based performance for various periods is included in the Fund's most recent report to shareholders and is different.
|Fund performance and distribution rate information|
|Fiscal year-to-date 11/1/2014 to 8/31/2015|
|Year-to-date Cumulative Net Asset Value Return1||-11.81%|
|Cumulative Distribution Rate2||6.31%|
|Preceding five-year period 9/1/2010 to 8/31/2015|
|5 Years Average Annual Total Net Asset Value Return1||0.19%|
|Average Annual Distribution Rate3||7.83%|
|Current Annualized Distribution Rate4||8.88%|
|1 The Fund's net asset value ("NAV") returns assume, for illustration only, that dividends and other distributions, if any, were reinvested at the NAV on the payable dates.|
|2 Cumulative Distribution Rate for the Fund's fiscal period (November 1, 2014 through August 31, 2015) measured on the dollar value of distributions in the year-to-date period as a percentage of the Fund's NAV as of August 31, 2015.|
|3 Average Annual Distribution Rate is the simple arithmetic average of the Annual Distribution Rates for the preceding five-year period. The Annual Distribution Rates are calculated by taking the total distributions paid during the period divided by average daily NAV for the period.|
4 The Current Annualized Distribution Rate is the current
monthly distribution rate annualized as a percentage of the Fund's
NAV as of
August 31, 2015.
Please refer to the chart below for information about the Fund's
historical NAVs, change in NAVs, total returns and distributions
paid. Performance data assumes reinvestment of distributions. Please
note that the table below reflects the characterization of
distributions on an accounting basis for a Fund's fiscal year-end
period, which may or may not match the amounts reported to a
shareholder on a tax basis for a calendar year in a tax Form 1099 to
shareholders given (1) the differences between the periods measured
and (2) accounting/tax reporting differences.
(More information regarding accounting/tax reporting differences may be found in the notes to the financial statements included in the Fund's shareholder reports.)
Fiscal year ending
|Average daily NAV for period||End of period NAV per share||
|Total returns||Distribution rate 2||Net investment income distributions paid||Short-term distributions paid||Long-term distributions paid||
|Total distributions paid|
|Since inception (October 8, 1993) annualized total return: 8.35%|
1 Figures are fiscal year to date, November 1, 2014 through August 31, 2015, and this period's final distribution characterization will not be completed until January 2016.
2 Distribution rate calculated by taking the total distributions paid within the period divided by average daily NAV for the period.
Any performance information reflects the deduction of the Fund's fees and expenses, as indicated in its shareholder reports, such as investment advisory and administration fees, custody fees, exchange listing fees, etc. It does not reflect any transaction charges that a shareholder may incur when (s)he buys or sells shares (e.g., a shareholder's brokerage commissions).
Investing in the Fund entails specific risks, such as interest rate risk and the risks associated with investing in the securities of issuers in emerging market countries. The value of the Fund's investments in foreign securities may fall due to adverse political, social and economic developments abroad and due to decreases in foreign currency values relative to the US dollar. Investments in emerging market issuers may decline in value because of unfavorable government actions, greater risks of political instability or the absence of accurate information about emerging market issuers. Further detailed information regarding the Fund, including a discussion of principal objectives, principal investment strategies and principal risks, may be found in the fund overview located at http://www.ubs.com/closedendfundsinfo. You may also request copies of the fund overview by calling the Closed-End Funds Desk at 888-793 8637.
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UBS Global Asset Management
Closed-End Funds Desk: 888-793 8637