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managed dividend policy including Return of Capital

edited April 2011 in Fund Discussions
Seems as if shareholders consider "distributions" as "dividends" disregarding the ROC.


  • I would think the SEC would demand Full Disclosure. In reading the message
    boards, most shareholders consider "distribution" as "earnings" and are unaware
    of the impact of ROC to their holdings.
  • dear spunky, what is the point of this message? are you discussing a particular fund, which returns capital as part of its distribution policy? there are many sophisticated investors on this board who understand the difference. also, what you're referring to is mostly attributable to closed-end funds, not mutual funds to which this board is generally dedicated (gabelli being an exception). Finally, there are different types of ROCs, some of which are "good" such as in covered call strategies. this board might benefit from somewhat more thoughtful discussion. Many thanks.
  • JR, managed payout mutual funds (launched in 2007 or 2008) also provide part of the return from ROC if the dividend and/or capital gain is not sufficient to provide the return expected. But that is disclosed to the investors.

  • agree. they are a narrow and specific new breed - investors (usually retirees) beware. we thought of launching something like this, but it didn't stand the backtest scrutiny. unless of course you wrap an annuity contract around your income fund, which adds tremendously to the costs. the original poster here though didn't go into any of this, but instead made a generic unsubstantiated statement.
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