Japan Smaller Capitalization Fund Implements Initiatives to Enhance Shareholder Value with Level Distribution Plan and Conditional Tender Offer.

Japan Smaller Capitalization Fund, Inc. has announced two initiatives to address its trading discount: a Level Distribution Plan to pay monthly distributions at a 10% annual rate and a conditional tender offer of 10% of its outstanding shares. The Level Distribution Plan includes monthly distributions of $0.0887 per common share for July, August, and September. The Fund believes these actions will enhance shareholder value, deliver competitive performance, and provide consistent distributions.

Japan Smaller Capitalization Fund, Inc. (NYSE: JOF) has taken significant steps to enhance shareholder value and address its trading discount. The Fund's Board of Directors has approved two key initiatives: a Level Distribution Plan (LDP) and a Conditional Tender Offer (CTO).

The Level Distribution Plan (LDP) is designed to provide monthly distributions at a 10% annual rate. This plan includes monthly distributions of $0.0887 per common share for July, August, and September 2025. The LDP aims to narrow the discount to the Fund's Net Asset Value (NAV) by providing a consistent, though not guaranteed, fixed rate of distribution each month. The distributions will primarily be made in cash, but shareholders can elect to receive distributions in Fund shares under the dividend-reinvestment plan. The actual composition of distributions for each fiscal year will be reported on Form 1099-DIV after year-end.

In addition to the LDP, the Fund has approved a Conditional Tender Offer (CTO) for 10% of its outstanding shares. The CTO will be triggered if the Fund's shares trade at an average daily market price discount of 9% or greater to NAV during the nine-month measurement period from July 1, 2025, to March 31, 2026. The Fund believes this rules-based approach provides clear, time-bounded relief to shareholders if the discount persists and complements the LDP.

The Fund's investment outlook remains positive, with Japanese market growth rates expected to be comparable to the United States in most sectors. Nomura Asset Management Co., Ltd. (NAM) expects Return on Equity (ROE) to continue its upward trend, supported by improvements in profit margins and revenue growth. The Fund's focus on long-term value creation and addressing shareholder interests underscores its commitment to delivering competitive performance and stable distributions.

References:
[1] https://www.globenewswire.com/news-release/2025/06/06/3095490/0/en/Japan-Smaller-Capitalization-Fund-Inc-Announces-Initiatives-to-Enhance-Shareholder-Value.html
[2] https://www.stocktitan.net/news/JOF/