NEUBERGER NEXT GENERATION CONNECTIVITY FUND INC. NOTICE TO SHAREHOLDERS - SOURCES OF DISTRIBUTION UNDER SECTION 19(a)

Neuberger Next Generation Connectivity Fund declared a $0.12 per-share monthly distribution payable September 30, 2026. The distribution is estimated to comprise $0.1108 (92.3%) of long-term capital gains and $0.0092 (7.7%) of return of capital, with no net investment income. Fiscal-year-to-date distributions total $1.32 per share, including 24.5% return of capital; the fund reported a 9.30% cumulative NAV total return through August 31 and an 8.24% annualized distribution rate.

Analysis

This is not a fundamental catalyst for listed connectivity equities; it is primarily a closed-end-fund technical. NBXG's fixed payout exceeds its trailing NAV return rate, creating a medium-term risk that the distribution policy is supported by NAV erosion rather than recurring portfolio cash generation. The relevant valuation variable is therefore the fund's market-price discount/premium to NAV, not the stated cash yield.

Over the next several days, the payable-date cash flow is mechanically neutral after the ex-date adjustment and should not be treated as income-driven demand for the underlying portfolio. Over 1-3 months, a widening discount is plausible if investors re-rate the payout as economically unsustainable, particularly if portfolio realizations slow and return-of-capital classifications rise at fiscal year-end. A narrowing discount would require independently observable NAV outperformance, not another unchanged monthly declaration.

Contrarian view: the modest return-of-capital component alone is not sufficient evidence of destructive distributions because realized-gain timing and tax characterization can differ from economic return. However, zero reported investment income means NBXG is unsuitable as a defensive income substitute; its payout depends on continued asset appreciation and realization capacity. The actionable signal is weak absent current NAV, market price, discount history, leverage, and portfolio concentration data.

Key Decisions for Investors

• No directional trade on this notice alone; avoid purchasing NBXG solely for its indicated distribution rate over the next 1-3 months.
• Create an NBXG watch alert: investigate a tactical long only if the market discount to NAV widens materially versus its 12-month percentile while NAV remains stable or rising; require daily NAV, market-price discount, leverage, and top holdings before entry.
• If NBXG trades at a premium to NAV, consider a 1-3 month relative-value short versus a broad communications/technology proxy such as IYZ or FCOM, subject to borrow availability and confirmation that the premium is not justified by a pending corporate action. Cover if the premium normalizes or NAV accelerates.
• Monitor the next annual report and tax classifications for a higher return-of-capital share, a distribution reduction, or NAV underperformance versus connectivity-sector benchmarks; any of these would validate a discount-widening thesis over 6-18 months.