Why Use NAV Total Return?
The NAV total return was employed as it represents monies directly invested with the manager and represents the total return results of its efforts. The NAV total return is not influenced by the price variability of the stock which is based on market forces outside the control of the investment manager. Winners and Losers: A sample 160 CEFs (600 CEF universe) with at least a 5 year operating history were engaged for this analysis. The chart below illustrates both the “Top 5” (green) and the “Bottom 5” CEFs (blue) based on VAMR NAV total return. Results: The average NAV total return for the Top 5 rankings for ValAddMgmtRtrnNAV was not that far apart (9.4% versus 7.2%, respectively). However, there was a stark difference in the “Value-Add” per fees paid relative to assets invested. At each end of the “barbell” both management fees and the standard deviation of NAV total returns played a meaningful role. The Top 5 was aided by a low expense ratio (0.49%) and lower historical return volati
