Hedged Equity & Income Fund (HEQ)

What You Should Know

You should not draw any conclusions about the Fund’s investment performance from the amount of these distributions or from the terms of the Fund’s managed distribution plan.

The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distributions may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”

The amounts and sources of distributions reported in the Fund's 19(a) Notices are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Effective with the quarterly distribution payable on September 28, 2012, the Fund declared its distribution pursuant to the Fund’s current managed distribution plan (the “Plan”). Under the Plan, the Fund makes quarterly distributions of an amount equal to $0.3230 per share, based upon an annual distribution rate of 7.25% of the Fund’s net asset value (“NAV”) of $17.82 on July 31, 2012 (representing a quarterly distribution rate of 1.8125% of the Fund’s July 31, 2012 NAV). The amount will be paid quarterly until further notice.

Closed-end fund shares are not redeemable, but instead are traded in the secondary market on an exchange such as the New York Stock Exchange or the NASDAQ. They frequently trade at a discount to net asset value. Specialized funds may carry additional risks. The distribution rate and income amounts reflect past amounts distributed and may not be indicative of future rates or income amounts. Distribution rates and income amounts can change at any time.