CHI - 'Destructive ROC': A Case Study - MFS Intermediate Income Trust

• A recent question from a reader presents a good "teaching moment" for evaluating closed-end fund distributions, especially the sustainability of the payout in relation to the fund's underlying earnings.
• We compare MIN's total return over the past 5-10 years to see whether it supports its current level of distribution, and it comes up short.
• In addition, we discuss a simple way to measure whether a closed-end fund's earnings are supporting its distribution.
• While some CEFs pay out more than they actually earn, fortunately there are many that do not. We provide some examples of our favorites.

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