| Lew, You are reading it correctly. Return of capital is a non-taxable event, but really means nothing. Why would I invest $100 in a fund if I wanted them to give me $2 of it back? Stupid, stupid, stupid. That being said, most income funds, especially CEFs, engage in these shenanigans. The theory is that the customers are so stupid they will not notice anything as long as the payout remains the same. So, if you don't get enough income to hit your bogey, and the bogey is usually way above income numbers, and the cap gains amount is low due to a lousy market, you throw the ducks some of their own feed back at them to keep the quacking at a low pitch. |
