The Fund files a complete
schedule of portfolio holdings with the Securities and Exchange Commission (the SEC) for the first and third quarters of each
fiscal year on Form N-PORT. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI
(800-422-3554). The Fund’s Form N-PORT is available on the SEC’s website at www.sec.gov and may also be reviewed and
copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may
be obtained by calling 800-SEC-0330.
The Fund files Form N-PX
with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. A description
of the Fund’s proxy voting policies, procedures, and how each Fund voted proxies relating to portfolio securities is available
without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center,
Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
See accompanying notes to financial statements.
See accompanying notes to financial
statements.
See accompanying notes to financial statements.
Ellsworth Growth and Income Fund Ltd.
Schedule of Investments (Continued) —
March 31, 2023 (Unaudited)
Principal
Amount | | |
| |
Cost | | |
Market
Value | |
| | | | |
U.S. GOVERNMENT OBLIGATIONS — 14.5% | |
| | | |
| | |
| $ | 27,300,000 | | |
U.S. Treasury Bills,
4.547% to 5.040%††,
04/13/23 to 08/24/23 | |
$ | 27,038,000 | | |
$ | 27,047,108 | |
| TOTAL INVESTMENTS — 100.0% | |
$ | 173,838,308 | | |
| 186,661,288 | |
| Other Assets and Liabilities (Net) | |
| | | |
| 700 | |
| PREFERRED SHARES | |
| | | |
| | |
| (3,670,315 preferred shares outstanding) | |
| | | |
| (54,212,875 | ) |
| NET ASSETS — COMMON SHARES | |
| | | |
| | |
| (13,779,242 common shares outstanding) | |
| | | |
$ | 132,449,113 | |
| NET ASSET VALUE PER COMMON SHARE | |
| | | |
| | |
| ($132,449,113 ÷ 13,779,242 shares outstanding) | |
| | | |
$ | 9.61 | |
| (a) | Securities
exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These
securities may be resold in transactions exempt from registration, normally to qualified
institutional buyers. |
| (b) | Security
is valued using significant unobservable inputs and is classified as Level 3 in the fair
value hierarchy. |
| (c) | Mandatory
convertible securities are required to be converted on the dates listed; they generally
may be converted prior to these dates at the option of the holder. |
| † | Non-income
producing security. |
| †† | Represents
annualized yields at dates of purchase. |
| ADR | American
Depositary Receipt |
See accompanying notes to financial
statements.
Ellsworth
Growth and Income Fund Ltd.
Statement of Assets and Liabilities
March 31, 2023 (Unaudited)
| Assets: | |
| |
| Investments, at value (cost $173,838,308) | |
$ | 186,661,288 | |
| Cash | |
| 73,924 | |
| Receivable for investments sold | |
| 1,205,590 | |
| Dividends and interest receivable | |
| 684,386 | |
| Deferred offering expense | |
| 153,444 | |
| Prepaid expenses | |
| 599 | |
| Total Assets | |
| 188,779,231 | |
| Liabilities: | |
| | |
| Distributions payable | |
| 311,905 | |
| Payable for investments purchased | |
| 1,500,000 | |
| Payable for investment advisory fees | |
| 107,748 | |
| Payable for payroll expenses | |
| 35,433 | |
| Payable for accounting fees | |
| 7,500 | |
| Payable for preferred offering expenses | |
| 17,983 | |
| Other accrued expenses | |
| 136,674 | |
| Total Liabilities | |
| 2,117,243 | |
| Preferred Shares: | |
| | |
| Series A Cumulative Preferred Shares (5.250%, $25 liquidation value, $0.01 par value, unlimited shares authorized with 1,167,315 shares issued and outstanding) | |
| 29,182,875 | |
| Series B Preferred Shares (4.400%, $10 liquidation value, unlimited shares authorized with 2,503,000 shares issued and outstanding) | |
| 25,030,000 | |
| Net Assets Attributable to Common Shareholders | |
$ | 132,449,113 | |
| | |
| | |
| Net Assets Attributable to Common Shareholders Consist of: | |
| | |
| Paid-in capital | |
$ | 121,033,671 | |
| Total distributable earnings | |
| 11,415,442 | |
| Net Assets | |
$ | 132,449,113 | |
| | |
| | |
| Net Asset Value per Common Share: | |
| | |
| ($132,449,113 ÷ 13,779,242 shares outstanding at $0.01 par value; unlimited number of shares authorized) | |
$ | 9.61 | |
Statement of Operations
For the Six Months Ended March 31, 2023 (Unaudited)
| Investment Income: | |
| |
| Dividends | |
$ | 634,220 | |
| Interest | |
| 1,907,546 | |
| Total Investment Income | |
| 2,541,766 | |
| Expenses: | |
| | |
| Investment advisory fees | |
| 637,136 | |
| Trustees’ fees | |
| 61,332 | |
| Shareholder communications expenses | |
| 45,768 | |
| Legal and audit fees | |
| 44,206 | |
| Payroll expenses | |
| 39,275 | |
| Shareholder services fees | |
| 33,485 | |
| Accounting fees | |
| 22,500 | |
| Custodian fees | |
| 8,450 | |
| Miscellaneous expenses | |
| 31,894 | |
| Total Expenses | |
| 924,046 | |
| Less: | |
| | |
| Expenses paid indirectly by broker (See Note 5) | |
| (1,336 | ) |
| Net Expenses | |
| 922,710 | |
| Net Investment Income | |
| 1,619,056 | |
| Net Realized and Unrealized Gain/(Loss) on Investments: | |
| | |
| Net realized gain on investments | |
| 3,865,607 | |
| Net change in unrealized appreciation/depreciation: | |
| | |
| on investments | |
| 4,437,263 | |
| Net Realized and Unrealized Gain/(Loss) on Investments | |
| 8,302,870 | |
| Net Increase in Net Assets Resulting from Operations | |
| 9,921,926 | |
| Total Distributions to Preferred Shareholders | |
| (1,316,472 | ) |
| Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations | |
$ | 8,605,454 | |
See accompanying notes to financial statements.
Ellsworth
Growth and Income Fund Ltd.
Statement of Changes in Net Assets Attributable
to Common Shareholders
| |
| Six Months Ended
March 31, 2023
(Unaudited) |
| Year Ended
September 30, 2022 |
| Operations: |
| |
| | |
| |
| | |
| Net investment income |
| |
$ | 1,619,056 | |
| |
$ | 1,211,817 | |
| Net realized gain on investments |
| |
| 3,865,607 | |
| |
| 4,874,085 | |
| Net change in unrealized appreciation/depreciation on investments |
| |
| 4,437,263 | |
| |
| (56,826,223 | ) |
| Net Increase/(Decrease) in Net Assets Resulting from Operations |
| |
| 9,921,926 | |
| |
| (50,740,321 | ) |
|
| |
| | |
| |
| | |
| Distributions to Preferred Shareholders from Accumulated Earnings |
| |
| (1,316,472 | )* |
| |
| (1,850,301 | ) |
| |
| |
| | |
| |
| | |
| Net Increase/(Decrease) in Net Assets Attributable to Common Shareholders Resulting from Operations |
| |
| 8,605,454 | |
| |
| (52,590,622 | ) |
| |
| |
| | |
| |
| | |
| Distributions to Common Shareholders from Accumulated Earnings |
| |
| (3,573,246 | )* |
| |
| (20,361,432 | ) |
| |
| |
| | |
| |
| | |
| Fund Share Transactions: |
| |
| | |
| |
| | |
| Net increase in net assets from common shares issued upon reinvestment of distributions |
| |
| 635,918 | |
| |
| 5,154,319 | |
| Net decrease in net assets from repurchase of common shares |
| |
| (19,910 | ) |
| |
| (2,068,339 | ) |
| Net increase in net assets from repurchase of preferred shares |
| |
| 78,268 | |
| |
| 2,575 | |
| Offering costs for preferred shares charged to paid-in capital |
| |
| — | |
| |
| (142,500 | ) |
| Net Increase in Net Assets from Fund Share Transactions |
| |
| 694,276 | |
| |
| 2,946,055 | |
| Net Increase/(Decrease) in Net Assets Attributable to Common Shareholders |
| |
| 5,726,484 | |
| |
| (70,005,999 | ) |
| |
| |
| | |
| |
| | |
| Net Assets Attributable to Common Shareholders: |
| |
| | |
| |
| | |
| Beginning of year |
| |
| 126,722,629 | |
| |
| 196,728,628 | |
| End of period |
| |
$ | 132,449,113 | |
| |
$ | 126,722,629 | |
| * | Based
on year to date book income. Amounts are subject to change and recharacterization at
year end. |
See accompanying notes to financial
statements.
Ellsworth
Growth and Income Fund Ltd.
Financial Highlights
Selected data for a common share of beneficial
interest outstanding throughout each period:
| | |
Six Months
Ended
March 31,
2023 | | |
Year Ended September 30, | |
| | |
(Unaudited) | | |
2022 | | |
2021 | | |
2020 | | |
2019 | | |
2018 | |
| Operating Performance: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net asset value, beginning of year | |
$ | 9.25 | | |
$ | 14.57 | | |
$ | 13.15 | | |
$ | 11.42 | | |
$ | 11.07 | | |
$ | 10.18 | |
| Net investment income | |
| 0.12 | | |
| 0.09 | | |
| 0.13 | | |
| 0.16 | | |
| 0.20 | | |
| 0.17 | |
| Net realized and unrealized gain/(loss) on investments | |
| 0.60 | | |
| (3.74 | ) | |
| 2.75 | | |
| 2.50 | | |
| 0.77 | | |
| 1.33 | |
| Total from investment operations | |
| 0.72 | | |
| (3.65 | ) | |
| 2.88 | | |
| 2.66 | | |
| 0.97 | | |
| 1.50 | |
| Distributions to Preferred Shareholders: (a) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net investment income | |
| (0.03 | )* | |
| (0.02 | ) | |
| (0.01 | ) | |
| (0.01 | ) | |
| (0.03 | ) | |
| (0.05 | ) |
| Net realized gain | |
| (0.07 | )* | |
| (0.11 | ) | |
| (0.11 | ) | |
| (0.11 | ) | |
| (0.09 | ) | |
| (0.07 | ) |
| Total distributions to preferred shareholders | |
| (0.10 | ) | |
| (0.13 | ) | |
| (0.12 | ) | |
| (0.12 | ) | |
| (0.12 | ) | |
| (0.12 | ) |
| Net Increase/(Decrease) in Net Assets Attributable to Common Shareholders Resulting from Operations | |
| 0.62 | | |
| (3.78 | ) | |
| 2.76 | | |
| 2.54 | | |
| 0.85 | | |
| 1.38 | |
| Distributions to Common Shareholders: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net investment income | |
| (0.07 | )* | |
| (0.19 | ) | |
| (0.17 | ) | |
| (0.14 | ) | |
| (0.12 | ) | |
| (0.19 | ) |
| Net realized gain | |
| (0.19 | )* | |
| (1.31 | ) | |
| (1.16 | ) | |
| (0.67 | ) | |
| (0.37 | ) | |
| (0.29 | ) |
| Total distributions to common shareholders | |
| (0.26 | ) | |
| (1.50 | ) | |
| (1.33 | ) | |
| (0.81 | ) | |
| (0.49 | ) | |
| (0.48 | ) |
| Fund Share Transactions: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Decrease in net asset value from common shares issued upon reinvestment of distributions | |
| (0.01 | ) | |
| (0.05 | ) | |
| (0.01 | ) | |
| (0.00 | )(b) | |
| (0.01 | ) | |
| (0.01 | ) |
| Increase in net asset value from repurchase of common shares (includes transaction costs) | |
| 0.00 | (b) | |
| 0.02 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Increase in net asset value from repurchase of preferred shares | |
| 0.01 | | |
| 0.00 | (b) | |
| — | | |
| — | | |
| — | | |
| — | |
| Offering costs and adjustment to offering costs for preferred shares charged to paid-in capital | |
| — | | |
| (0.01 | ) | |
| — | | |
| — | | |
| — | | |
| (0.00 | )(b) |
| Total Fund share transactions | |
| 0.00 | (b) | |
| (0.04 | ) | |
| (0.01 | ) | |
| (0.00 | )(b) | |
| (0.01 | ) | |
| (0.01 | ) |
| Net Asset Value Attributable to Common Shareholders, End of Period | |
$ | 9.61 | | |
$ | 9.25 | | |
$ | 14.57 | | |
$ | 13.15 | | |
$ | 11.42 | | |
$ | 11.07 | |
| NAV total return † | |
| 5.44 | % | |
| (28.73 | )% | |
| 21.75 | % | |
| 23.56 | % | |
| 7.89 | % | |
| 13.85 | % |
| Market value, end of period | |
$ | 8.11 | | |
$ | 8.01 | | |
$ | 13.36 | | |
$ | 11.55 | | |
$ | 10.49 | | |
$ | 10.31 | |
| Investment total return †† | |
| 2.90 | % | |
| (31.71 | )% | |
| 27.12 | % | |
| 18.60 | % | |
| 6.98 | % | |
| 17.08 | % |
| Ratios to Average Net Assets and Supplemental Data: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net assets including liquidation value of preferred shares, end of period (in 000’s) | |
$ | 186,662 | | |
$ | 181,713 | | |
$ | 226,729 | | |
$ | 203,596 | | |
$ | 178,692 | | |
$ | 173,192 | |
| Net assets attributable to common shares, end of period (in 000’s) | |
$ | 132,449 | | |
$ | 126,723 | | |
$ | 196,729 | | |
$ | 173,596 | | |
$ | 148,692 | | |
$ | 143,192 | |
| Ratio of net investment income to average net assets attributable to common shares before preferred share distributions | |
| 2.44 | %(c) | |
| 0.74 | % | |
| 0.79 | % | |
| 1.36 | % | |
| 1.80 | % | |
| 1.64 | % |
| Ratio of operating expenses to average net assets attributable to common shares (d)(e) | |
| 1.39 | %(c) | |
| 1.16 | % | |
| 1.01 | % | |
| 1.23 | % | |
| 1.20 | % | |
| 1.18 | % |
| Portfolio turnover rate | |
| 20 | % | |
| 37 | % | |
| 34 | % | |
| 52 | % | |
| 52 | % | |
| 35 | % |
See accompanying notes to financial
statements.
Ellsworth
Growth and Income Fund Ltd.
Financial
Highlights (Continued)
Selected
data for a common share of beneficial interest outstanding throughout each period:
| | |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| | |
Six Months
Ended March
31, 2023 | | |
Year Ended September 30, | |
| | |
(Unaudited) | | |
2022 | | |
2021 | | |
2020 | | |
2019 | | |
2018 | |
| Cumulative Preferred Shares: | |
| | |
| | |
| | |
| | |
| | |
| |
| 5.250% Series A Preferred | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Liquidation value, end of period (in 000’s) | |
$ | 29,183 | | |
$ | 29,961 | | |
$ | 30,000 | | |
$ | 30,000 | | |
$ | 30,000 | | |
$ | 30,000 | |
| Total shares outstanding (in 000’s) | |
| 1,167 | | |
| 1,198 | | |
| 1,200 | | |
| 1,200 | | |
| 1,200 | | |
| 1,200 | |
| Liquidation preference per share | |
$ | 25.00 | | |
$ | 25.00 | | |
$ | 25.00 | | |
$ | 25.00 | | |
$ | 25.00 | | |
$ | 25.00 | |
| Average market value (f) | |
$ | 22.87 | | |
$ | 24.82 | | |
$ | 26.10 | | |
$ | 25.59 | | |
$ | 24.64 | | |
$ | 24.56 | |
| Asset coverage per share (g) | |
$ | 86.08 | | |
$ | 82.61 | | |
$ | 188.94 | | |
$ | 169.66 | | |
$ | 148.91 | | |
$ | 144.33 | |
| 4.400% Series B Preferred | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Liquidation value, end of period (in 000’s) | |
$ | 25,030 | | |
$ | 25,030 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Total shares outstanding (in 000’s) | |
| 2,503 | | |
| 2,503 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Liquidation preference per share | |
$ | 10.00 | | |
$ | 10.00 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Average market value (f)(h) | |
$ | 10.00 | | |
$ | 10.00 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Asset coverage per share (g) | |
$ | 34.43 | | |
$ | 33.04 | | |
| — | | |
| — | | |
| — | | |
| — | |
| Asset Coverage (i) | |
| 344 | % | |
| 330 | % | |
| 756 | % | |
| 679 | % | |
| 596 | % | |
| 577 | % |
| † | Based
on net asset value per share, adjusted for reinvestment of distributions at net asset
value on the ex-dividend date. Total return for a period of less than one year is not
annualized. |
| †† | Based
on market value per share, adjusted for reinvestment of distributions at prices obtained
under the Fund’s dividend reinvestment plan. Total return for a period of less
than one year is not annualized. |
| * | Based
on year to date book income. Amounts are subject to change and recharacterization at
year end. |
| (a) | Calculated
based on average common shares outstanding on the record dates throughout the periods. |
| (b) | Amount
represents less than $0.005 per share. |
| (d) | The
Fund received credits from a designated broker who agreed to pay certain Fund operating
expenses. For all periods presented, there was no impact on the expense ratios. |
| (e) | Ratio
of operating expenses to average net assets including liquidation value of preferred
shares for the six months ended March 31, 2023 and the years ended September 30, 2022,
2021, 2020, 2019, and 2018 would have been 0.99%, 0.95%, 0.88%, 1.03%, 0.99%, and 0.96%,
respectively. |
| (f) | Based
on weekly prices. |
| (g) | Asset
coverage per share is calculated by combining all series of Preferred stock. |
| (h) | The
Series B Preferred is a private placement and is not listed on an exchange, nor does
the Fund expect a secondary market to develop. The average market price shown is the
$10 liquidation preference of the Series B Preferred. |
| (i) | Asset
coverage is calculated by combining all series of preferred stock. |
See accompanying notes to financial
statements.
Ellsworth Growth
and Income Fund Ltd.
Notes to Financial
Statements (Unaudited)
1.
Organization. The Ellsworth Growth and Income
Fund Ltd. is organized as a Delaware statutory trust. The Fund is a diversified closed-end management investment company registered
under the Investment Company Act of 1940, as amended (the 1940 Act). The Fund commenced investment operations on July 1, 1986.
The Fund’s
primary investment objective is to provide income and the potential for capital appreciation, which objectives the Fund considers
to be relatively equal over the long term due to the nature of the securities in which it invests. The Fund invests primarily in
convertible and equity securities.
2.
Significant Accounting Policies. As an investment
company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting
principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its financial statements.
Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
The global outbreak
of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions, and
the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the
value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve
its investment objectives.
Security
Valuation. Portfolio securities listed or traded on a nationally recognized
securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are
valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the
securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and
asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on
that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or,
if the Board of Trustees (the Board) so determines, by such other method as the Board shall determine in good faith to
reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued
according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the Adviser).
Portfolio securities
primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market,
but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close
of the foreign market, but prior to the close of business on the day the securities are being valued. Debt obligations for which
market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices
quoted on such day, the securities are valued using the closing bid price, unless the Board determines such amount does not reflect
the securities’ fair value, in which case these securities will be fair valued as determined by the Board. Certain securities
are valued principally using dealer quotations. Futures contracts are valued at the closing settlement price of the exchange or
board of trade on which the applicable contract is traded. OTC futures and options on futures for which market quotations are readily
available will be valued by quotations received from a pricing service or, if no quotations are available from a pricing service,
by quotations obtained from one or more dealers in the instrument in question by the Adviser.
Securities and assets
for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies
and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about
the company; comparisons with the valuation and
Ellsworth
Growth and Income Fund Ltd.
Notes
to Financial Statements (Unaudited) (Continued)
changes in valuation of
similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt
securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of
the security.
The inputs and
valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described
in the hierarchy below:
| ● | Level 1 — quoted prices in active markets for identical
securities; |
| ● | Level 2 — other significant observable inputs (including
quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
| ● | Level 3 — significant unobservable inputs (including
the Board’s determinations as to the fair value of investments). |
A financial instrument’s
level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is
significant to the fair value measurement. The inputs or methodology used for valuing securities are not necessarily an indication
of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs
used to value the Fund’s investments as of March 31, 2023 is as follows:
| | |
Valuation Inputs | | |
| | |
| | |
Level 1
Quoted Prices | | |
Level 2 Other
Significant
Observable Inputs | | |
Level 3 Significant
Unobservable
Inputs (a) | | |
Total Market Value
at 03/31/23 | |
| INVESTMENTS IN SECURITIES: | |
| | | |
| | | |
| | | |
| | |
| ASSETS (Market Value): | |
| | | |
| | | |
| | | |
| | |
| Convertible Corporate Bonds (b) | |
| — | | |
$ | 116,434,194 | | |
| — | | |
$ | 116,434,194 | |
| Convertible Preferred Stocks (b) | |
| — | | |
| — | | |
$ | 3 | | |
| 3 | |
| Mandatory Convertible Securities: | |
| | | |
| | | |
| | | |
| | |
| Energy and Utilities | |
$ | 2,731,891 | | |
| 818,654 | | |
| — | | |
| 3,550,545 | |
| Financial Services | |
| — | | |
| 2,015,882 | | |
| — | | |
| 2,015,882 | |
| Other Industries (b) | |
| 1,604,700 | | |
| — | | |
| — | | |
| 1,604,700 | |
| Total Mandatory Convertible Securities | |
| 4,336,591 | | |
| 2,834,536 | | |
| — | | |
| 7,171,127 | |
| Common Stocks(b) | |
| 36,008,856 | | |
| — | | |
| — | | |
| 36,008,856 | |
| U.S. Government Obligations | |
| — | | |
| 27,047,108 | | |
| — | | |
| 27,047,108 | |
| TOTAL INVESTMENTS IN SECURITIES – ASSETS | |
$ | 40,345,447 | | |
$ | 146,315,838 | | |
$ | 3 | | |
$ | 186,661,288 | |
| (a) | The
inputs for these securities are not readily available and are derived based on the judgment
of the Adviser according to procedures approved by the Board. |
| (b) | Please
refer to the Schedule of Investments for the industry classifications of these portfolio
holdings. |
During the six months ended March 31, 2023, the
Fund did not have transfers into or out of Level 3.
Additional
Information to Evaluate Qualitative Information.
General.
The Fund uses recognized industry pricing services – approved by the Board and
unaffiliated with the Adviser – to value most of its securities, and uses broker quotes provided by market makers of securities
not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity
securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds
are ultimately sourced from major stock exchanges and trading systems
Ellsworth
Growth and Income Fund Ltd.
Notes
to Financial Statements (Unaudited) (Continued)
where these securities
trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants.
If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a
broker/dealer that trades that security or similar securities.
Fair
Valuation. Fair valued securities may be common or preferred equities, warrants, options, rights, or fixed income obligations.
Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for
several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security,
factors to consider include recent prices of comparable securities that are publicly traded, reliable prices of securities not
publicly traded, the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if
the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in
Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue
to apply.
The Adviser reports quarterly
to the Board the results of the application of fair valuation policies and procedures. These may include backtesting the prices
realized in subsequent trades of these fair valued securities to fair values previously recognized.
Investments
in Other Investment Companies. The Fund may invest, from time to time, in shares of other investment companies (or entities
that would be considered investment companies but are excluded from the definition pursuant to certain exceptions under the 1940
Act) (the Acquired Funds) in accordance with the 1940 Act and related rules. Shareholders in the Fund would bear the pro rata
portion of the periodic expenses of the Acquired Funds in addition to the Fund’s expenses. During the six months ended March
31, 2023, the Fund did not incur any periodic expenses charged by Acquired Funds.
Foreign
Currency Translations. The books and records of the Fund are maintained in U.S. dollars.
Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at current exchange rates. Purchases
and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates
of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices
of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net
realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between
the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign
currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale
trade date is included in realized gain/(loss) on investments.
Foreign
Securities. The Fund may directly purchase securities of foreign issuers. Investing
in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers.
The risks include possible revaluation of currencies, the inability to repatriate funds, less complete financial information about
companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than securities of comparable U.S. issuers.
Ellsworth
Growth and Income Fund Ltd.
Notes
to Financial Statements (Unaudited) (Continued)
Foreign
Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or
currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based
upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
Restricted
Securities. The Fund may invest up to 20% of its net assets in securities for which
the markets are restricted. Restricted securities include securities whose disposition is subject to substantial legal or contractual
restrictions. The sale of restricted securities often requires more time and results in higher brokerage charges or dealer discounts
and other selling expenses than the sale of securities eligible for trading on national securities exchanges or in the over-the-counter
markets. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale.
Securities freely saleable among qualified institutional investors under special rules adopted by the SEC may be treated as liquid
if they satisfy liquidity standards established by the Board. The continued liquidity of such securities is not as well assured
as that of publicly traded securities, and accordingly the Board will monitor their liquidity. For the restricted security held
as of March 31, 2023, please refer to the Schedule of Investments.
Securities
Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss)
on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion
of discount) is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield
to maturity method or amortized to earliest call date, if applicable. Dividend income is recorded on the ex-dividend date, except
for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of
such dividends. For certain securities known as ”contingent payment debt instruments,” Federal tax regulations require
the Fund to record non-cash, “contingent” interest income in addition to interest income actually received.
Distributions to Shareholders.
Distributions to common shareholders are recorded on the ex-dividend date. The characterization of distributions to shareholders
is based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income
and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on
various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations
of distributions made by the Fund. Distributions from net investment income for federal income tax purposes include net realized
gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these
differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
Under the Fund’s current
common share distribution policy, the Fund declares and pays quarterly distributions from net investment income, capital gains,
and paid-in capital. The actual source of the distribution is determined after the end of the year. Pursuant to this policy, distributions
during the year may be made in excess of required distributions. To the extent such distributions are made from current earnings
and profits, they are considered ordinary income or long term capital gains. The Fund’s current distribution policy may restrict
the Fund’s ability to pass through to shareholders all of its net realized long term capital gains as a Capital Gain Dividend
and may cause such gains to be treated as ordinary income, subject to the maximum federal income tax rate. Distributions sourced
from paid-in capital should not be considered as dividend yield or the total return from an investment in the Fund. The Board will
continue to monitor the Fund’s distribution level, taking into consideration
Ellsworth
Growth and Income Fund Ltd.
Notes
to Financial Statements (Unaudited) (Continued)
the Fund’s NAV and
the financial market environment. The Fund’s distribution policy is subject to modification by the Board at any time.
Distributions to shareholders
of the Fund's 5.250% Series A and 4.400% Series B Cumulative Preferred Shares (Preferred Shares) are recorded on a daily basis
and are determined as described in Note 6.
The tax character of distributions paid during
the fiscal year ended September 30, 2022 was as follows:
| | |
Common | | |
Preferred | |
| Distributions
paid from: | |
| | | |
| | |
| Ordinary
income (inclusive of short term capital gains) | |
$ | 3,141,773 | | |
$ | 285,502 | |
| Net
long term capital gains | |
| 17,219,659 | | |
| 1,564,799 | |
| Total
distributions paid | |
$ | 20,361,432 | | |
$ | 1,850,301 | |
Provision
for Income Taxes. The Fund intends to continue to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). It is the policy of the Fund to comply
with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment
company taxable income and net capital gains. Therefore, no provision for federal income taxes is required.
The following summarizes
the tax cost of investments and the related net unrealized appreciation at March 31, 2023:
| | |
Cost | |
Gross
Unrealized
Appreciation | |
Gross
Unrealized
Depreciation | |
Net Unrealized
Appreciation |
| Investments | |
$173,838,343 | |
$28,713,341 | |
$(15,890,396) | |
$12,822,945 |
The Fund is required to
evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether
the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related
interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were
deemed not to meet the more-likely-than-not threshold. During the six months ended March 31, 2023, the Fund did not incur any income
tax, interest or penalties. As of March 31, 2023, the Adviser has reviewed the open tax years and concluded that there was no tax
impact to the Fund’s net assets or results of operations. The Fund’s current federal and state tax returns for the
prior three fiscal years remain open, subject to examination. On an ongoing basis, the Adviser will monitor the Fund’s tax
positions to determine if adjustments to this conclusion are necessary.
3. Investment Advisory
Agreement. The Fund has entered into an investment advisory agreement (the Advisory Agreement) with the Adviser which provides
that the Fund will pay the Adviser a fee, computed weekly and paid monthly, equal on an annual basis to 0.80% of the first $100,000,000
of the Fund’s average weekly net assets including the liquidation value of preferred shares and 0.55% of the Fund’s
average weekly net assets including the liquidation value of preferred shares in excess of $100,000,000. In accordance with the
Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio and oversees the administration
of all aspects of the Fund’s business and affairs.
Ellsworth Growth
and Income Fund Ltd.
Notes to Financial
Statements (Unaudited) (Continued)
4. Portfolio
Securities. Purchases and sales of securities during the six months ended March 31, 2023, other than short term securities
and U.S. Government obligations, aggregated $32,664,302 and $38,839,158, respectively.
5.
Transactions with Affiliates and Other Arrangements. During
the six months ended March 31, 2023, the Fund received credits from a designated broker who agreed to pay certain Fund operating
expenses. The amount of such expenses paid through this directed brokerage arrangement during this period was $1,336.
The cost of calculating
the Fund’s NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. Under the
sub-administration agreement with Bank of New York Mellon, the fees paid include the cost of calculating the Fund’s NAV.
The Fund reimburses the Adviser for this service. During the six months ended March 31, 2023, the Fund accrued $22,500 in accounting
fees in the Statement of Operations.
As per the approval
of the Board, the Fund compensates officers of the Fund, who are employed by the Fund and are not employed by the Adviser (although
the officers may receive incentive based variable compensation from affiliates of the Adviser). During the six months ended March
31, 2023, the Fund accrued $39,275 in payroll expenses in the Statement of Operations.
The Fund pays retainer
and per meeting fees to Trustees not affiliated with the Adviser, plus specified amounts to the Lead Trustee and Audit Committee
Chairman. Trustees are also reimbursed for out of pocket expenses incurred in attending meetings. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund.
6. Capital.
The Fund is authorized to issue an unlimited number of common shares of beneficial interest (par value $0.01). The Board has
authorized the repurchase of the Fund’s common shares on the open market when the shares are trading at a discount of 10%
or more (or such other percentage as the Board may determine from time to time) from the NAV of the shares. During the six months
ended March 31, 2023 and the fiscal year ended September 30, 2022, the Fund repurchased and retired 2,400 and 222,248 of its common
shares at an investment of $19,910 and $2,068,339, respectively, at average discounts of approximately 13.82% and 13.42% from NAV.
Transactions in
shares of common shares of beneficial interest for the six months ended March 31, 2023 and the fiscal year ended September 30,
2022 were as follows:
| | |
Six Months Ended
March 31, 2023
(Unaudited) | | |
Year Ended
September 30, 2022 | |
| | |
Shares | | |
Amount | | |
Shares | | |
Amount | |
| | |
| | | |
| | | |
| | | |
| | |
| Increase in net assets from common shares issued upon reinvestment of distributions | |
| 75,976 | | |
$ | 635,918 | | |
| 428,456 | | |
$ | 5,154,319 | |
| Decrease in net assets from repurchase of common shares | |
| (2,400 | ) | |
| (19,910 | ) | |
| (222,248 | ) | |
| (2,068,339 | ) |
| Net increase | |
| 73,576 | | |
$ | 616,008 | | |
| 206,208 | | |
$ | 3,085,980 | |
The Fund’s Declaration of Trust, as
amended, authorizes the issuance of an unlimited number of preferred shares, par value $0.01. The Preferred Shares are senior
to the common shares and result in the financial leveraging of the common shares. Such leveraging tends to magnify both the
risks and opportunities to common
Ellsworth
Growth and Income Fund Ltd.
Notes
to Financial Statements (Unaudited) (Continued)
shareholders. Dividends
on Preferred Shares are cumulative. The Fund is required by the 1940 Act and by the Fund’s Statement of Preferences to meet
certain asset coverage tests with respect to the Preferred Shares. If the Fund fails to meet these requirements and does not correct
such failure, the Fund may be required to redeem, in part or in full, the Preferred Shares at their respective liquidation values
plus an amount equal to the accumulated and unpaid dividends whether or not declared on such shares in order to meet these requirements.
Additionally, failure to meet the foregoing asset coverage requirements could restrict the Fund’s ability to pay dividends
to common shareholders and could lead to sales of portfolio securities at inopportune times. The income received on the Fund’s
assets may vary in a manner unrelated to the fixed rates, which could have either a beneficial or detrimental impact on net investment
income and gains available to common shareholders.
The liquidation
value of the Series A Preferred is $25 per share. The Series A Preferred has an annual dividend rate of 5.25% and is callable
at the Fund's option. The Board has authorized the repurchase of the Series A Preferred in the open market at prices less than
the $25 liquidation value per share. During the six months ended March 31, 2023, and the fiscal year ended September 30, 2022,
the Fund repurchased and retired 31,113 and 1,572 Series A Preferred, at investments of $699,557 and $36,725 at average discounts
of approximately 10.10% and 6.59%, from its liquidation value.
On July 1, 2022,
the Fund issued 2,503,000 shares of Series B 4.40% Cumulative Preferred Shares (Series B Preferred) receiving $24,887,500 million
after the deduction of estimated offering expenses of $142,500. The Series B Preferred shares have a liquidation value of $10
per share and an annual dividend rate of 4.40%. The Series B Preferred Shares are puttable on June 26, 2023 and June 26, 2024
and are callable after June 26, 2024. Distributions are at an annual rate of 4.40% and are paid semiannually. At March 31, 2023,
2,503,000 shares of Series B Preferred were outstanding and accrued dividends amounted to $290,626.
The following table summarizes Cumulative Preferred
Shares information:
| Series | |
Issue Date | |
Authorized | |
Number of
Shares
Outstanding at
3/31/2023 | |
Net Proceeds | |
2023 Dividend
Rate Range | |
Dividend
Rate at
3/31/2023 | |
Accrued
Dividends at
3/31/2023 |
| A 5.250% | |
September 18, 2017 | |
unlimited | |
1,167,315 | |
$28,855,381 | |
Fixed Rate | |
5.250% | |
$21,279 |
| B 4.400% | |
July 1, 2022 | |
unlimited | |
2,503,000 | |
$24,887,500 | |
Fixed Rate | |
4.400% | |
$290,626 |
The holders of Preferred
Shares generally are entitled to one vote per share held on each matter submitted to a vote of shareholders of the Fund and will
vote together with holders of common shares as a single class. The holders of Preferred Shares voting together as a single class
also have the right currently to elect two Trustees and, under certain circumstances, are entitled to elect a majority of the
Board of Trustees. In addition, the affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding
shares of the preferred shares, voting as a single class, will be required to approve any plan of reorganization adversely affecting
the preferred shares, and the approval of two-thirds of each class, voting separately, of the Fund’s outstanding voting
stock must approve the conversion of the Fund from a closed-end to an open-end investment company. The approval of a majority
(as defined in the 1940 Act) of the outstanding preferred shares and a majority (as defined in the 1940 Act) of the Fund’s
outstanding voting securities are required to approve certain other actions, including changes in the Fund’s investment
objectives or fundamental investment policies.
7. Significant Shareholder. As
of March 31, 2023, approximately 6.2% of the combined Common and Preferred Shares were beneficially owned by the Adviser and its
affiliates, including managed accounts for which the affiliates of the Adviser have voting control but disclaim pecuniary interest.
Ellsworth Growth
and Income Fund Ltd.
Notes to Financial
Statements (Unaudited) (Continued)
8. Convertible
Securities Concentration. It is the Fund’s policy to invest at least 65% of its assets in convertible securities. Although
convertible securities derive part of their value from that of the securities into which they are convertible, they are not considered
derivative financial instruments. However, the Fund’s mandatory convertible securities include features which render them
more sensitive to price changes of their underlying securities. Thus they expose the Fund to greater downside risk than traditional
convertible securities, but generally less than that of the underlying common stock.
9.
Indemnifications. The Fund enters into contracts that contain a variety of indemnifications.
The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant
to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
10. Subsequent Events. The Board
of Trustees increased the dividends on the Ellsworth Growth and Income Fund Series B Cumulative Preferred Shares (“Series
B Preferred”) to an annual rate of 5.20% based on the liquidation preference of the Series B Preferred, effective April
17, 2023.
Shareholder Meeting – May 22, 2023 –
Final Results
The Fund’s Annual
Meeting of Shareholders was held on May 22, 2023. At that meeting common and preferred shareholders, voting together as a single
class, re-elected Kinchen C. Bizzell, James P. Conn, and Frank J. Fahrenkopf as Trustees of the Fund, with 9,807,567 votes, 9,755,059
votes, and 9,702,565 votes cast in favor of these Trustees, and 3,199,112 votes, 3,251,620 votes, and 3,304,115 votes withheld
for these Trustees, respectively.
In addition, preferred
shareholders, voting as a separate class, re-elected Michael J. Melarkey as a Trustee of the Fund, with 2,487,530 votes cast in
favor of this Trustee and 21,132 votes withheld for this Trustee. Mario J. Gabelli, Elizabeth C. Bogan, James A. Dinsmore, Daniel
D. Harding, Kuni Nakamura, Nicolas W. Platt, and Anthonie C. van Ekris continue to serve in their capacities as Trustees of the
Fund.
We thank you for your participation and appreciate
your continued support.
ELLSWORTH
GROWTH AND INCOME FUND LTD.
AND
YOUR PERSONAL PRIVACY
Who are we?
The Ellsworth Growth and
Income Fund Ltd.is a closed-end management investment company registered with the Securities and Exchange Commission under the
Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is affiliated with GAMCO Investors, Inc., a publicly
held company that has subsidiaries that provide investment advisory services for a variety of clients.
What kind of non-public information do we
collect about you if you become a fund shareholder?
When you purchase shares
of the Fund on the NYSE American, you have the option of registering directly with our transfer agent in order, for example, to
participate in our dividend reinvestment plan.
| ● | Information you give us on your application form.
This could include your name, address, telephone number, social security number, bank account number, and other information. |
| ● | Information about your transactions with us. This
would include information about the shares that you buy or sell; it may also include information about whether you sell or exercise
rights that we have issued from time to time. If we hire someone else to provide services — like a transfer agent —
we will also have information about the transactions that you conduct through them. |
What information do we disclose and to whom
do we disclose it?
We do not disclose
any non-public personal information about our customers or former customers to anyone other than our affiliates, our service
providers who need to know such information, and as otherwise permitted by law. If you want to find out what the law permits,
you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of
Federal Regulations, Part 248. The Commission often posts information about its regulations on its website, www. sec.gov.
What do we do to protect your personal information?
We restrict access to non-public
personal information about you to the people who need to know that information in order to provide services to you or the fund
and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural
safeguards to keep your personal information confidential.
Ellsworth
Growth and Income Fund Ltd.
One
Corporate Center
Rye,
NY 10580-1422
(Y)our
Portfolio Management Team Biographies
Thomas H. Dinsmore, CFA,
joined Gabelli Funds, LLC in 2015. He currently serves as a portfolio manager of Gabelli
Funds, LLC and manages several funds within the Fund Complex. Previously Mr. Dinsmore was Chairman and CEO of Dinsmore Capital
Management; CEO and Portfolio Manager of Bancroft Fund Ltd; and CEO, Portfolio Manager, and co-founder of Ellsworth Growth and
Income Fund Ltd. He received a BS in Economics from the Wharton School of Business and an MA degree in Economics from Fairleigh
Dickinson University.
James A.
Dinsmore, CFA, joined Gabelli Funds, LLC in
2015. He currently serves as a portfolio manager of Gabelli Funds, LLC and manages several funds within the Fund Complex. Mr. Dinsmore
received a BA in Economics from Cornell University and an MBA degree from Rutgers University.
The net asset value per
share appears in the Publicly Traded Funds column, under the heading “Specialized Equity Funds,” in Monday’s
The Wall Street Journal. It is also listed in Barron’s Mutual Funds/Closed End Funds section under the heading “Convertible
Securities Funds.”
The net asset value per share may be obtained
each day by calling (914) 921-5070 or visiting www.gabelli.com.
The NASDAQ symbol for the net asset value is
“XECFX.”
Notice is hereby given in
accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may from time to time purchase its
common shares in the open market when the Fund’s shares are trading at a discount of 10% or more from the net asset value
of the shares. The Fund may also, from time to time, purchase its preferred shares in the open market when the preferred shares
are trading at a discount to the liquidation value. |
