MMT - MIN: Still The Poster Child For Distributing More Than You Earn

• Last year we used MFS Intermediate Income Trust (MIN) as the ideal case study for explaining how to tell the difference between "constructive" and "destructive" return of capital.
• Unfortunately MIN's is the "destructive" variety since they have a long history of paying out more in distributions than the fund actually earns.
• The fund pays out a distribution of 8.58%, higher even than most high-yield bond funds, but it invests in Treasuries and investment grade bonds paying just a fraction of that.
• That leaves a big gap that comes out of - guess where? - market price and NAV erosion year after year.
• MIN has essentially turned itself into an annuity that will eventually run out of capital.

For further details see: