- Liberty All Star Growth Fund is currently trading at a steep premium to net asset value of 8.14%, leading one to believe that management quality is the primary reason.
- An analysis against an investable benchmark using three low-fee ETFs shows that management has not demonstrated enough security selection skills to justify its 1.21% management fee.
- Distributions are almost entirely made up of long-term capital gains, meaning that if performance in growth stocks stalls, both the distribution and unit price will fall.
- I recommend that unless a high distribution yield is needed, current investors switch to a low-fee ETF alternative as they wait for the fund's premium to lower or even switch to a discount.
For further details see:
Liberty All Star Growth Fund: It's Riskier Than You Think