The DNP Select Income Fund Inc. (NYSE: DNP) is a diversified, closed-end management investment company that first offered its common stock to the public in January 1987. The Fund's primary investment objectives are current income and long-term growth of income. Capital appreciation is a secondary objective. DNP has outstanding Floating Rate Mandatory Redeemable Preferred Shares (MRPS), secured borrowings and secured notes to leverage the common stockholders' investment.
The Fund seeks to achieve its investment objectives by investing primarily in a diversified portfolio of equity and fixed income securities of companies in the public utilities industry. The Fund's investment strategies have been developed to take advantage of the income and growth characteristics, and historical performances of securities of companies in the public utilities industry.
Under normal conditions, more than 65% of the Fund's total assets will be invested in securities of public utility companies engaged in the production, transmission or distribution of electric energy, gas or telephone services.
The Fund may invest in the securities of domestic and foreign issuers as well as in securities of companies of any market capitalization, including small and mid cap common and preferred stocks. The Fund may not invest more than 25% of its total assets (valued at the time of investment) in securities of companies engaged principally in any one industry other than the public utilities industry, nor have more than 20% invested in foreign issuers. The Fund will purchase a fixed income security only if, at the time of purchase, it is rated investment grade by at least two nationally recognized statistical rating organizations.
Fund Asset Type2
As of 07/31/21 (Unaudited)
Fund Industry Sectors2
As of 07/31/21 (Unaudited)
Top 10 Holdings2
As of 07/31/21 (Unaudited)
|Alliant Energy Corp||2.6%|
|Public Service Entrp Grp Inc||2.5%|
|CMS Energy Corp||2.4%|
|Centerpoint Energy Inc||2.4%|
|XCEL Energy Inc||2.4%|
|Dominion Energy Inc||2.4%|
Common Shares Dividend Distribution Information
The distributions listed in the table below reflect the amount of cash payment per share. A portion of the cash distribution represents return of capital. Any portion of the Fund’s distribution that is a return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. SEC 19(a) Shareholder Notices are available on this website on the page labeled “Reports & Notices”. Each 19(a) Shareholder Notice provides an estimate of the sources of each distribution based on U.S. generally accepted accounting principles which may differ from federal income tax regulations. On the webpage labeled “Tax Information”, we have posted the annual Tax Information Letter for each calendar year that informs shareholders of the sources of distributions for federal income tax purposes.
|Declaration date||Record date||Payable||Amount|
SEC 19(a) Shareholder Notice
PLEASE READ CAREFULLY
These letters show the character of distributions paid by your Fund on its common stock for the calendar years shown. The letters should assist you in the preparation of your federal and state income tax returns.
The Fund is qualified as a “regulated investment company” as defined in the applicable provisions of the Internal Revenue Code of 1986. If the investment income dividends you received from the Fund are subject to Federal and/or state income tax, those dividends will be taxed as ordinary dividends whether received in cash or reinvested in stock. The percentage of each investment income dividend that is qualified dividend income is contained in the letters. The percentage of each investment income dividend that qualifies for the dividends received deduction allowed to certain corporate shareholders is contained in the letters.
Return of capital is a nontaxable transaction. Your cost basis must be reduced by this amount until the basis of your stock has been reduced to zero. Any excess is treated as gain from the sale of shares. Please consult your tax adviser regarding the proper treatment of this transaction.
RP Share Tax Information
MRP Share Tax Information
Form 8937: Organizational Actions Affecting Basis of Securities
Issuers of corporate securities are required to complete Internal Revenue Service Form 8937 to report organizational actions that affect the basis of securities. Examples of organizational actions that could affect basis are reorganizations, stock splits or nontaxable distributions.
The board of directors has adopted the following procedures for shareholders to send communications to the board of directors. Shareholders may mail written communications to the full board, to committees of the board or to specified individual directors in care of the Secretary of the Fund, 200 S. Wacker Drive, Suite 500, Chicago, IL 60606. All shareholder communications received by the Secretary will be forwarded promptly to the full board, the relevant board committee or the specified individual directors, as applicable, except that the Secretary may, in good faith, determine that a shareholder communication should not be so forwarded if it does not reasonably relate to the Fund or its operations, management, activities, policies, service providers, board, officers, shareholders or other matters relating to an investment in the Fund or is purely ministerial in nature.
Important Risk Considerations
Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector.
Credit and Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer term maturities.
Preferred Stocks: Preferred stocks may decline in price, fail to pay dividends, or be illiquid.
MLPs: Investments in Master Limited Partnerships (MLPs) may be adversely impacted by tax law changes, regulation, or factors affecting underlying assets.
Foreign Investing: Investing internationally involves additional risks such as currency, political, accounting, economic, and market risk.
No Guarantee: There is no guarantee that the portfolio will meet its objective.
Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.
Market Volatility: Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions, or other events could have a significant impact on the fund and its investments, including hampering the ability of the fund's portfolio manager(s) to invest the fund's assets as intended.
This information does not represent an offer, or the solicitation of an offer, to buy or sell securities of the Fund.
1Net Asset Value vs. Market Price: Net Asset Value (NAV) represents the total value of all assets held by the Fund (minus its total liabilities), divided by the total number of common shares outstanding. The net asset value returns reflect the performance of the manager. Market price is the price at which investors may purchase or sell shares of the Fund. Market price is determined in the open market by buyers and sellers, based on supply and demand. The Fund’s Market Price fluctuates throughout the day and may differ from its underlying NAV. Shares of the Fund may trade at a premium (higher than) or a discount (lower than) to NAV. This characteristic is a risk separate and distinct from the risk that the Fund’s net asset value could decline. The Fund has no control over the market price.
2Percentages based on total investments rather than total net assets. The portfolio is actively managed and subject to change.