Ellsworth Convertible Growth & IF (ECF)

Ellsworth Convertible Growth & Income Fund: A Comprehensive Overview

Company Profile:

History and Background:

Ellsworth Convertible Growth & Income Fund (NYSE: ECIF) is a closed-end management investment company incorporated in Maryland in 1987. It has been listed on the New York Stock Exchange since 1993. ECIF aims to provide investors with long-term capital appreciation and current income by investing primarily in a diversified portfolio of convertible securities and equity income securities.

Core Business Areas:

• Convertible Securities: ECIF invests in convertible bonds and preferred stocks that offer the potential for capital appreciation through equity-like returns and income through fixed interest payments.
• Equity Income Securities: The fund also invests in common stocks of companies with a history of paying dividends and potential for future growth.

Leadership and Corporate Structure:

• Board of Directors: ECIF's Board comprises nine independent directors with extensive experience in finance, investment management, and corporate governance.
• Management Team: The fund's investment advisor is Ellsworth Management, LLC, a registered investment advisor with over 30 years of experience managing convertible and income-oriented strategies.

Top Products and Market Share:

Top Products:

• Ellsworth Convertible Growth & Income Fund (ECIF): This is the flagship fund, offering exposure to a diversified portfolio of convertible securities and equity income securities.
• Ellsworth Convertible Growth & Income Fund II (ECIF II): This is a newer fund launched in 2021, focusing on similar investment strategies as ECIF.

Market Share:

ECIF and ECIF II are relatively small players in the convertible bond and equity income market. However, they hold a strong track record of performance within their respective categories. As of September 30, 2023, ECIF and ECIF II have assets under management of $428.8 million and $149.2 million, respectively.

Product Performance:

Both ECIF and ECIF II have outperformed their benchmark indices in recent years. ECIF's total return for the one year ended September 30, 2023, was 16.9%, compared to 9.5% for the S&P 500 Index. ECIF II's total return for the same period was 18.3%.

Competitive Landscape:

ECIF and ECIF II compete with other closed-end funds and ETFs that invest in convertible securities and equity income securities. Some key competitors include:

• BlackRock Convertible & Income Fund (BHY): A larger competitor with over $2 billion in assets under management.
• Nuveen Convertible & Income Fund (JPC): Another established competitor with over $1 billion in assets under management.
• VanEck Merk Convertible Fund (MUTF): An actively managed fund with a focus on high-quality convertible bonds.

Competitive Advantages:

• Experienced Management Team: Ellsworth Management has a long and successful track record in managing convertible and income-oriented strategies.
• Diversified Portfolio: ECIF and ECIF II invest in a wide range of convertible securities and equity income securities, reducing portfolio concentration risk.
• Strong Track Record: Both funds have outperformed their benchmark indices in recent years, demonstrating the effectiveness of their investment strategies.

Total Addressable Market:

The total addressable market for convertible securities and equity income securities is substantial. According to Preqin, the global convertible bond market size was estimated at $538 billion in 2022 and is expected to grow to $720 billion by 2027. The US equity income market is even larger, with trillions of dollars invested in dividend-paying stocks.

Financial Performance:

Revenue and Earnings:

ECIF's total revenue for the fiscal year ended March 31, 2023, was $46.4 million, compared to $42.7 million for the previous fiscal year. Net income for the same period was $21.3 million, up from $19.2 million in the previous year. Earnings per share (EPS) were $1.92, compared to $1.72 in the previous year.

Profitability:

ECIF's profit margins have remained stable in recent years. The fund's operating margin for fiscal year 2023 was 46%, and its net profit margin was 46%, indicating efficient cost management and strong profitability.

Cash Flow and Balance Sheet:

ECIF's cash flow from operations has been consistently positive in recent years. As of March 31,