Co-produced by Stanford Chemist. This article was originally published on October 13th, 2019.
We recently dived into the benefits of capital gains in distributions, so it felt like an appropriate time to illustrate the often misunderstood return of capital (ROC). This is a commonly debated topic within the closed-end fund (CEF) community and is often a source of confusion. This is especially true for newer CEF investors. That doesn't have to be so, shedding some light on the possible reasons for ROC may further help an investor grasp the concept that ROC isn't always