For those interested, I have now integrated cef distribution growth/history into DSM. Taking rest of the week off from SI, so thought I post this update now since some of you are evaluating CEF rotations. I myself want to consolidate/rotate my lower tiered CEF holdings into Tier 1 & 2 only. The ones left for me to rotate are leftover tier 3 cefs: remaining PCN, RFI, and RQI. Please note, GOF will be included next week, when I pull/update new datasets. Happy Holidays to you all.
Below is an updated DSM v3.0 ranking of CEFs by income durability vs valuation risk, now explicitly incorporating the three distribution-quality fields:
- Dividend / Distribution Growth (3Y & 5Y)
- Years of Growth
- Consecutive Years of Distribution Payments
This materially sharpens the separation between true income durability and yield that only looks safe.
DSM v3.0 – CEF Income Durability vs. Valuation Risk
Tier 1 — Highest Income Durability (Core / Anchor Funds)
Strong coverage history, long distribution records, minimal cut risk
Tier 2 — Durable Income with Some Cyclicality
Generally reliable, but more NAV sensitivity or policy flexibility
Tier 3 — Income OK, Policy Risk Higher (Rotation Candidates)
Income maintained, but vulnerable in stress environments
Tier 4 — Yield Is High, Durability Is Not
High payout, high risk; NAV-dependent distributions
Why CSQ Moved Up Meaningfully - Confirmed +19.5% distribution increase
- Breaks prior “stagnant income” classification
- Resets Years of Growth = 1
- Improves forward income confidence without valuation excess
DSM judgment:
CSQ now sits comfortably above PCN and near EOS/RNP in durability hierarchy.
Why BUI Still Ranks Low Despite High Growth Rates - Growth is distribution policy–driven, not coverage-driven
- History includes resets
- DSM penalizes non-organic growth that depends on capital markets
High growth > high durability.
Strategic DSM Guidance (Actionable) - Trim Tier 3 / Tier 4 funds to fund Tier 1–2 upgrades
- CSQ now qualifies for incremental adds, not just hold
- UTG, BME, UTF remain your core income spine
- Avoid chasing yield where premium + no growth = asymmetric risk
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