Saba Capital’s Mid‑February Sell‑Off of Ellsworth Growth Signals Possible Strategic Shift for EGIF Investors

Saba Capital’s Recent Sell‑Off Signals a Strategic Re‑balance

Saba Capital Management, L.P. has liquidated 14,110 shares of Ellsworth Growth and Income Fund Ltd. (EGIF) on February 11, 2026, reducing its stake from 1,646,578 to 1,632,468 shares. The sale came at a price of $12.24 per share, far below the fund’s current market price of $21.72. While the transaction itself is modest relative to Saba’s total holdings, its timing—just days after two large sell‑offs in early February—raises questions about the firm’s view on EGIF’s near‑term prospects.

Implications for Investors and the Fund’s Future

The price at which Saba sold is roughly half the prevailing market level, suggesting the firm may have taken a loss or is locking in gains after a prior purchase. This action could be interpreted in several ways:

• Portfolio Rebalancing: Saba may be reallocating capital toward higher‑yield or higher‑growth assets, possibly within Gabelli’s broader convertible‑security portfolio.
• Risk Management: The fund’s price has remained near its 52‑week low since September 2025, indicating limited upside. Saba’s exit may reflect a cautious stance amid the fund’s narrow volatility corridor.
• Signal to the Market: As a major shareholder, Saba’s sell may prompt other investors to reassess their positions, potentially tightening the trading range further and elevating the fund’s beta.

For individual investors, a cautious approach is warranted. The fund’s price trajectory shows modest upside potential, but the recent sell activity suggests that institutional confidence may be wavering. Monitoring subsequent filings—particularly any new purchases or further sales—will be essential to gauge whether this is a transient adjustment or part of a longer‑term strategic shift.

Saba Capital Management: A Profile of Patterns

Saba Capital has a history of sizable transactions in EGIF, with two large sells in February 2026 (26,218 shares at $11.95 and 7,824 shares at $12.02) that collectively reduced its holdings by approximately 34,042 shares. The firm’s trading pattern is characterized by:

• Active Position Management: Frequent adjustments to its stake, often in multiples of 7,824 shares, suggesting a systematic approach rather than opportunistic trades.
• Price‑Driven Execution: Sell prices have hovered just below the fund’s average trading price, indicating a preference for liquidity at discount levels.
• Limited Buying Activity: No recorded purchases in the recent filing set, implying a current focus on divestiture rather than accumulation.

Historically, Saba has maintained a sizable but flexible presence in closed‑ended funds like EGIF, aligning its holdings with broader macro‑economic and sectoral trends. Its recent series of sales may reflect a repositioning strategy amid a relatively flat market for convertible‑security funds.

Looking Ahead

The combination of Saba’s recent sell, its historic transaction cadence, and the fund’s stable yet compressed price range suggest that EGIF’s trajectory may hinge on broader market dynamics rather than any single event. Investors should watch for:

1. Subsequent filings from Saba or other major shareholders to confirm whether the sell-offs are part of a systematic exit or a short‑term rebalancing.
2. Fund performance metrics (dividend yield, NAV fluctuations) that could attract or repel capital in the long run.
3. Macroeconomic signals affecting convertible securities, such as interest‑rate changes and equity market volatility, which could either catalyze a rebound or exacerbate downward pressure.

In sum, while Saba Capital’s latest sale does not spell immediate doom for EGIF, it underscores the importance of vigilant monitoring and a nuanced understanding of institutional behavior in shaping a fund’s future prospects.