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Overview of the Allspring Utilities and High Income Fund

On February 3, 2025, Allspring Global Investments released an important notice to shareholders concerning the Allspring Utilities and High Income Fund (ERH). This communication aims to clarify the sources of the fund's monthly distributions, providing essential insights to investors. Shareholders are advised not to draw conclusions about the fund's performance based solely on distribution amounts or the details of its Managed Distribution Plan.

Fund Distribution Insights

The Allspring Utilities and High Income Fund estimates that it has distributed more than its income and net realized capital gains. As a result, a portion of the monthly distributions may constitute a return of capital. This return of capital occurs when a part of the investor's initial investment is returned, which does not reflect the fund’s investment performance and should not be mistaken for 'yield' or income. It’s vital for shareholders to understand that these amounts are estimates and are not meant for tax reporting purposes.

Estimated Sources of Distribution

The distribution sources, as per the latest data, include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT), and capital that has been paid in. Actual amounts may vary and are dependent on the fund's investment activities during the fiscal year, subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV detailing how to report these distributions for federal income tax purposes.

Performance Over Time

To help shareholders gauge if returns have met distribution goals, a table comparing the fund's distribution against annualized data across various time periods has been provided. This comparison aids in understanding whether the fund's returns have been sufficient relative to its distributions. For example, as of December 31, 2024, the fund had a fiscal year-to-date distribution rate of 6.58% based on its net asset value (NAV).

Managed Distribution Plan

The Allspring Utilities and High Income Fund adheres to a managed distribution plan, declaring monthly distributions at a minimum fixed rate of 7.0% calculated from the fund's average monthly NAV over the prior 12 months. It is crucial for investors to comprehend that the distributions made may be greater or less than the actual net return earned by the fund’s investments. Those distributions exceeding the fund's returns may lead to a decline in the NAV. As such, investors are warned against drawing conclusions about the fund’s performance based solely on the distribution amounts.

Final Remarks

It’s important to note that the Allspring Utilities and High Income Fund is a closed-end fund that is no longer available for initial public offerings (IPO). It is traded through secondary markets, where share values can fluctuate based on various market factors. Investors are also reminded of the inherent risks associated with high-yield securities and market concentration, which could amplify the volatility of their investment.

Shareholders are encouraged to stay informed and consider the broader context of their investments in the Allspring Utilities and High Income Fund. For further information on Allspring’s investment offerings, you are invited to visit the official website.

Allspring Global Investments operates under strict guidelines to ensure transparent information dissemination to its investors. As such, this material serves as an educational resource and is not intended to offer investment advice or recommendations.