The investment objective of the Fund is to provide attractive total return, comprised of high current income and price appreciation primarily through mid-stream MLPs and energy investments. Mid-stream MLPs and energy investments are engaged in the exploration, production, gathering, transportation, processing, storage, refining, distribution or marketing of gas, oil and coal related energy sources.
Managed assets are as of June 30, 2015.
Expense ratios as disclosed in the Fund’s most recent annual report to stockholders dated November 30, 2014. Expense ratios are net of waivers and/or reimbursements.
Portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. Top ten holdings are determined on the basis of the value of individual securities held. The Fund may also hold positions in other types of securities issued by the companies listed above. You can obtain a complete listing of holdings by clicking here
NAV per share is as of the prior day’s market close of regular trading on the NYSE, generally 4:00 p.m. Eastern time, on each day the NYSE is open for trading.
Distribution Rate is calculated dividing the last distribution paid per share (annualized) by the market price. Note that the number of income distributions is based on the fund’s distribution payment frequency (i.e. monthly or quarterly). A fund may pay distributions in excess of its net investment company taxable income and, to the extent this occurs, the distribution yield quoted will include a return of capital. The estimated return of capital for each distribution is also available on this Web site by clicking on the Distributions tab on each fund’s landing page.
SEC yield is calculated by dividing annualized net investment income per share during a 30-day period by the maximum offering price per share as of the close of that period. SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities. Since certain distributions received by the funds from master limited partnerships (MLPs) may consist of dividend income, and/or return of capital, and the character of these distributions cannot be determined until after the end of the year, the SEC yield has been adjusted for the funds that invest significantly in MLPs based on estimates of return of capital.
Quarterly distribution per share is as of the most recent quarter end. The fund pays regular quarterly cash distributions to common shareholders at a level rate that may be adjusted from time to time, based on the projected income of the fund. The amount of quarterly distributions may vary depending on a number of factors, including changes in portfolio and market conditions. Each fund’s distributions reflect net investment income, and may also include net realized capital gains and/or return of capital. Return of capital includes distributions paid by a fund in excess of its net investment income and such excess is distributed from the fund’s assets. Under federal tax regulations, some or all of the return of capital distributed by a fund may be taxed as ordinary income.
In addition, distributions for funds investing in master limited partnerships (MLPs) may later be characterized as net investment income and/or a return of capital, depending on the character of the dividends reported to each fund after year-end by MLPs held by a fund.
However, please note that distributions are subject to recharacterization for tax purposes and the final tax treatment of these distributions will be reported to shareholders after the close of each fiscal year on form 1099-DIV.
Risks of Investing in MLP Securities
An investment in MLPs involves risks that differ from a similar investment in equity securities, such as common stock, of a corporation. Holders of equity securities issued by MLPs have the rights typically afforded to limited partners in a limited partnership. As compared to common shareholders of a corporation, holders of such equity securities have more limited control and limited rights to vote on matters affecting the partnership. There are certain tax risks associated with an investment in equity MLP units. Additionally, conflicts of interest may exist among common unit holders, subordinated unit holders and the general partner or managing member of an MLP; for example a conflict may arise as a result of incentive distribution payments.
Because the Fund will invest at least 80% of its Managed Assets in MLPs and energy investments, the Fund will be subject to more risks related to the energy sector than if the Fund were more broadly diversified over numerous sectors of the economy. A downturn in the energy sector of the economy could have a larger impact on the Fund than on an investment company that does not concentrate in the sector. In addition, there are several specific risks associated with investments in the energy sector, including the following: Commodity Price Risk, Depletion Risk, Supply and Demand Risk, Regulatory Risk, Acquisition Risk, Weather Risks, Exploration Risk, Catastrophic Event Risk, Interest Rate Transaction Risk, Affiliated Party Risk and Limited Partner Risk and Risks of Subordinated MLP Units. MLPs which invest in the energy industry are highly volatile due to significant fluctuation in the prices of energy commodities as well as political and regulatory developments.
On August 2, 2013, the Internal Revenue Service (IRS) issued proposed regulations which, if adopted in their current form, would require the Fund to limit its overall investment in MLPs to no more than 25% of the Fund's total assets, or to change its tax status in order to hold more than 25% in MLPs. The proposed regulations would not limit the Fund's investments in affiliates of MLPs or other Energy Investments structured as corporations rather than as MLPs. The proposal has no immediate impact on the current operations of the Fund. It has not been determined whether, when and in what form these proposed regulations will be adopted, or, if adopted, the impact such regulations may have on the Fund. If ultimately adopted, the regulations are expected to apply 90 days after publication of the new rules. The Fund believes that, in the event the proposed regulations are adopted, the Fund will be able to otherwise continue to pursue its investment objective and strategies by maintaining its status as a regulated investment company or by converting to a C-Corporation for tax purposes. Converting to a C-Corporation or maintaining the Fund's tax status as a regulated investment company may have a significant impact on the Fund's net asset value.
MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership.
MLPs may trade less frequently than larger companies due to their small capitalizations which may result in erratic price movement or difficulty in buying or selling.
A significant portion of the Fund's distributions will consist of return of capital for U.S. federal tax purposes, which reduce a shareholder's adjusted cost basis in the Fund's shares and impacts the amount of any capital gains or loss realized by the shareholder upon selling the Fund's shares. Once a shareholder's adjusted cost basis has been reduced to zero (due to return of capital), any further return of capital will be treated as a capital gain.
MLPs may have additional expenses, as some MLPs pay incentive distribution fees to their general partners. The value of MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If MLPs were subject to U.S. federal income taxation, distributions generally would be taxed as dividend income. As a result, after-tax returns could be reduced, which could cause a decline in the value of MLPs. If MLPs are unable to maintain partnership status because of tax law changes, the MLPs would be taxed as corporation and there could be a decrease in the value of the MLP securities.
The Fund's subsidiary investment does not offer the same tax benefits of a direct investment in an MLP. The subsidiary is organized as a Subchapter "C" Corporation and is subject to U.S. federal income tax on taxable income at the corporate tax rate (currently as high as 35%) as well as state and local income taxes.
Shares of many closed-end funds frequently trade at a discount from their net asset value. The funds are subject to stock market risk, which is the risk that stock prices overall will decline over short or long periods, adversely affecting the value of an investment in a fund.
An investment in MLPs involves risks that differ from a similar investment in equity securities, such as common stock, of a corporation. Holders of equity securities issued by MLPs have the rights typically afforded to limited partners in a limited partnership. As compared to common shareholders of a corporation, holders of such equity securities have more limited control and limited rights to vote on matters affecting the partnership. There are certain tax risks associated with an investment in equity MLP units. Additionally, conflicts of interest may exist among common unit holders, subordinated unit holders and the general partner or managing member of an MLP; for example a conflict may arise as a result of incentive distribution payments. Because the Fund invests significantly in MLPs and energy investments, the Fund will be subject to more risks related to the energy sector. A downturn in the energy sector of the economy could have a larger impact on the Fund than on an investment company that does not concentrate in the sector.
Special risks of investing in foreign securities include (i) currency fluctuations, (ii) lower liquidity, (iii) political and economic uncertainties, and (iv) differences in accounting standards. Some international securities may represent small- and medium-sized companies, which may be more susceptible to price volatility and less liquid than larger companies.
The fund is classified as a "non-diversified" fund under the federal securities laws because it can invest in fewer individual companies than a diversified fund. However, the fund must meet certain diversification requirements under the U.S. tax laws.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE