USA: A Historical Underperformer, But Value-Orientation Might Be Appealing

2025-05-11 12:16:06 ET

Summary

• The Liberty All-Star Equity Fund offers a high 9.20% yield, significantly above major American equity indices, making it attractive for income-seeking investors.
• Despite its high yield, the fund has underperformed the S&P 500 Index over the past 30 years, which is disappointing considering that some of its peers consistently beat it.
• The fund's unique structure with multiple managers and a 60/40 value-to-growth split provides diversification but has contributed to its underperformance compared to peers.
• Trading at a slight discount to NAV, the fund's expense ratio is reasonable, but investors may prefer waiting for a better price given its mixed track record.

The Liberty All-Star Equity Fund ( USA ) is a very popular closed-end fund that invests in a portfolio of American common equity securities, along with providing its investors with a very attractive 9.20% yield. This yield is substantially higher than any of the major American equity indices, as clearly shown here:

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