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) and bank loan 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.
Important Risk Considerations
The market price of equity securities may be 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.
Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a security may fail to make payments in a timely manner. Values of debt securities may rise and fall in response to changes in interest rates. This risk may be enhanced with longer term maturities.
Preferred stocks may decline in price, fail to pay dividends, or be illiquid.
Investments in Master Limited Partnerships (MLPs) may be impacted by tax law changes, regulation, or factors affecting underlying assets.
Investing internationally involves additional risks such as currency, political, accounting, economic, and market risk.
There is no guarantee that the portfolio will meet its objective.
When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.
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 on the New York Stock Exchange. 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 on the New York Stock Exchange.
2Percentages based on total investments rather than total net assets. The portfolio is actively managed and subject to change.
3The ratings issued by Nationally Recognized Statistical Rating Organizations assess the credit worthiness of a corporation’s debt issues. The ratings apply to the Fund’s holdings and not the Fund itself. The lower rating of Moody’s or Standard & Poor’s is used. Ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB and below are below-investment grade ratings.
Top Ten Holdings2
|as of 7/31/14
|NextEra Energy Inc.
|Alliant Energy Corp.
|XCEL Energy Inc.
|Verizon Communications Inc.
|Spectra Energy Corp.
Ratings of Corporate Bonds2,3
|Rating - Lower of Moody's or S&P as of 7/31/14
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Brokerage account shareholders ("street name") please contact your broker.