Aberdeen Or 'abrdn' - Either Way The Coverage Looks A Bit Thin

2025-01-17 11:10:47 ET

Summary

• Closed-end funds offer unique advantages, like buying at discounts and leveraging with institutionally priced debt, making them ideal income-generating vehicles.
• Cash distributions are key contributors to total return, but it is essential to be sure they are actually covered by fund earnings.
• Some investors overly prioritize distribution yields, neglecting the importance of considering total return as a whole.
• Aberdeen (aka abrdn) funds often seem to "push the envelope" regarding paying out more than they actually earn.

The idea that we could generate "equity returns" with less of the volatility and stress that keeps many investors awake at night, by replacing typical growth stocks with credit and similar high yielding investments, was considered a pretty radical idea when I first suggested it a decade or so ago here on Seeking Alpha. "Creating our own growth" via reinvesting and compounding high cash distributions, was how I often described it. ...

Read the full article on Seeking Alpha

For further details see: