CCD - CEF Focus Investing: 'Everything You Always Wanted To Know About Total Return'

• NAV performance, discount on NAV, and leverage constitute the three main parameters of my rule of thumb to select funds for a long-term CEF portfolio.
• I’m contemplating adding a fourth metric, Total Return, which is calculated based on the amount of distributions plus the change in a CEF’s NAV value.
• For the distributions to be sustainable, the Yield on NAV (the ratio between a fund’s distribution and its NAV), must be lower than the fund’s Total Return.
• My reviewed rule of thumb: “Choose a CEF with a positive NAV trend, the highest discount and the lowest leverage, whose Total Return is more than its Yield on NAV."

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