SABA Declares $0.058 Dividend

11/03/2025 – 08:45 AM

NEW YORK – Saba Capital Income & Opportunities Fund II (NYSE: SABA), a closed-end fund, has announced a monthly dividend of $0.058 per share. The dividend, declared on October 31, 2025, is payable on November 28, 2025, to shareholders of record as of November 11, 2025. This consistent distribution strategy aims to provide shareholders with a steady income stream, but analysts caution investors to understand the mechanics and potential implications of the fund’s managed distribution plan.

The Managed Distribution Plan: A Closer Look

Saba Capital Income & Opportunities Fund II operates under a managed distribution plan, targeting a fixed monthly payout of $0.058 per share. This approach is designed to provide investors with a predictable income stream. However, the fund may utilize long-term capital gains or return of capital to maintain this fixed rate, especially if investment income falls short in a given month.

This is where it gets interesting from a financial perspective. While a consistent dividend is attractive, relying on capital gains or return of capital to fund distributions raises questions about the long-term sustainability of the payout. Return of capital, in particular, essentially returns a portion of the investor’s original investment, reducing the fund’s net asset value (NAV).

The Fund’s management emphasizes that the Board of Trustees can amend or terminate the plan at any time. While the plan intends to narrow the discount between the market price and the net asset value of the Fund’s common shares, there’s no guarantee of its success, and altering or discontinuing the plan could negatively affect the fund’s share price.

Investor Considerations and Tax Implications

Investors will receive a Rule 19a-1 notice detailing the source of the dividend income (net investment income, capital gains, or return of capital). However, the fund notes that the actual source can only be definitively determined at year-end. The tax treatment may also differ from the accounting treatment used in shareholder statements, and individual investors should consult their tax advisors for appropriate guidance.

Portfolio Composition and Risk Factors

Saba Capital Income & Opportunities Fund II invests globally in both debt and equity securities, including closed-end funds, special purpose acquisition companies (SPACs), reinsurance, and public and private debt instruments. The fund also utilizes derivatives, such as total return swaps and credit default swaps, to potentially enhance returns or mitigate risk. This diverse, sometimes complex, portfolio construction warrants careful examination.

Investing in a fund like SABA comes with inherent risks. The value of its equity holdings fluctuates with market conditions and the performance of individual issuers. Investments in closed-end funds and SPACs carry their own specific risks. The fund’s exposure to reinsurance-related securities makes it vulnerable to losses from catastrophic events. Furthermore, investments in high-yield securities introduce the possibility of default and illiquidity. Currency fluctuations also present a risk, although the fund aims to hedge against these. The fund’s concentrated portfolio may also increase volatility.

Past performance is not indicative of future results, and investors should carefully consider the investment objective, risks, and expenses before investing. Detailed information is available in the Fund’s filings with the Securities and Exchange Commission.

About Saba Capital Income & Opportunities Fund II

Saba Capital Income & Opportunities Fund II is a publicly-traded, registered closed-end management investment company (NYSE: SABA) managed by Saba Capital Management, L.P.

Forward-Looking Statements

This announcement contains forward-looking statements, which involve risks and uncertainties. Actual results may differ materially due to factors outlined in the Fund’s filings with the Securities and Exchange Commission. The Fund undertakes no obligation to update these statements.

For further information on Saba Capital Income & Opportunities Fund II, please visit www.sabacef.com.