Important Fund Distribution Information for Allspring Utilities and High Income Fund Shareholders

Understanding Your Monthly Distribution from Allspring Utilities and High Income Fund

Allspring Utilities and High Income Fund (ERH) has issued an important notice to shareholders concerning the sources of its monthly distributions. This is crucial information for investors who seek clarity on how their potential returns are calculated. The notice emphasizes that shareholders should not make assumptions about the fund's investment performance based solely on the amount of these distributions or the Managed Distribution Plan operational terms.

Estimation of Distributions

According to the fund's analysis, it has distributed more than what has been generated through its income and net realized capital gains. As a result, part of the money returned to investors may essentially be a return of capital. This means if you receive distributions, some of this could be money you've initially invested being paid back to you.

It is important to distinguish between a return of capital and actual yield or income produced by the investments. A return of capital does not necessarily indicate a strong investment performance. The sources of distributions include net investment income (NII), short-term capital gains (ST), long-term capital gains (LT), and paid-in capital, which reflects the overall financial activity of the fund throughout its fiscal year.

Detailed Sources Breakdown

The table outlining recent distributions shows that as of September 30, 2025, the distribution per share was estimated at $0.08220, composed of:

- 45.50% from net investment income
- 54.50% from paid-in capital

Both the current month and fiscal year to date share the same breakdown, highlighting the consistency in how distributions are projected. However, it is essential to note that these figures are preliminary estimates and not intended for tax reporting purposes.

Performance Overview

The fund provides additional information on its performance over various timeframes, assisting shareholders in understanding whether the returns for those periods suffice to meet distribution requirements. For the fiscal year to date compared to prior years, the metrics indicate some fluctuations that should prompt investors to review the associated risks thoroughly.

The plan governs the monthly distributions to common shareholders with a minimum fixed annual rate target of 8.0%. These distributions can be influenced by several factors including income earned, capital gains, and even paid-in capital.

Given the fund's nature as a closed-end equity and high-yield bond fund, the investment objective is focused on achieving high levels of current income along with moderate capital growth while also emphasizing tax-advantaged dividends. This classification brings certain risks, especially if distributions happen to be more than the actual earned net returns. Such discrepancies can lead to a decline in the fund's net asset value (NAV).

Special Considerations

Investors are cautioned against interpreting high distribution amounts as direct indicators of performance. This caution extends particularly to how funds often manage distributions that might not be directly aligned with the income generated from investments. Therefore, understanding the complexity of these distributions remains vital, as they may cause significant impacts on the fund’s NAV.

Investors can expect to receive a Form 1099-DIV from the fund at year-end for tax reporting purposes, reflecting the actual amounts and sources for tax filing pertaining to these distributions. This will facilitate proper guidance on financial reporting obligations to federal tax authorities.

In conclusion, the notice issued by Allspring highlights the importance of awareness regarding distribution sources and their implications on overall investment performance. Shareholders are encouraged to develop a complete understanding of how their returns are shaped and pay close attention to any changes in the fund’s operational strategy or financial health. For additional insights, shareholders are urged to visit Allspring's website, where they can find more detailed information on closed-end funds and associated investment practices.