Intermediate
Distribution rate is not investment return
A distribution rate describes a cash payment relative to a price or NAV. Total return also includes changes in the value of the investment.
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Closed End Funds Investment Guide
Understand closed end funds, investigate discounts and distributions, and build a disciplined research process. Follow eight stages from ownership and market pricing to portfolio construction and advanced analysis.
Start with What you own in a closed end fund, then follow the next lesson links. Explore 32 lessons with worked examples, exercises and further reading.
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Distributions and Income · All lessons
Distributions and Income
Distinguish cash payments, portfolio earnings and investment returns.
Intermediate
Income coverage and undistributed investment income
Income coverage compares investment earnings with distributions. Undistributed net investment income adds context, but neither measure should be read without its reporting period.
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Intermediate
Return of capital and the health of a fund
Return of capital is a distribution classification. To judge whether a payment is economically damaging, examine the fund’s returns, assets and policy separately.
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Intermediate
Managed distributions and reinvestment choices
A managed distribution policy can make cash payments more regular. Reinvestment then determines whether that cash becomes additional shares or remains available for spending.
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