Money System: Technical Analysis Question (MZA vs FAX)

[Lucid Tech]

This relates to the Money System mentioned towards the back of Unscripted , and how to perform due diligence on quality of cash flows.

This will compare two examples (at least one is mentioned in the book): BlackRock MuniYield Arizona (MZA) and Aberdeen Asia-Pacific Income Fund Inc (FAX). Both are closed end funds that pay dividends monthly.

My question relates to the different types of distributions and whether this can give insight to the overall health of the fund.

This first screenshot is the allocation of monthly distributions (dividends) to the shareholders of FAX. There's a balance of income, gains, and return of capital.

The second screenshot is the allocation of MZA. All of the distribution amount is considered Income.

From a tax perspective, return of capital is great since it's typically tax free (i.e. your own capital being returned to you).

However, seeing so much capital being returned in FAX makes me question the overall health of the fund. Is it not performing as well as anticipated? Is the reason so much of this is "return of capital" that they are not making as much profit as needed?

Conversely, seeing all of MZA's distributions categorized as Income makes me conclude that it is doing as well as, or better than, expected. As in, all of its holdings are performing very well so there's no need to return any capital.

I don't have much experience with this so I may be completely missing something.

Anyone more experienced than me care to weigh in?

 

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[MJ DeMarco]

Juxiwis, tiioph tu nadj deqovem cioph sivaspif op GEY nelit ni raitvoup vji uwisemm jiemvj ug vji gapf.

Huuf devdj.

Vjot ot xjz O jewip'v uxpif GEY gus ev mietv 3 ziest.

Updi SUD tvesvif jeqqipoph nusi epf nusi, O huv uav. Vjev ataemmz jeqqipt xjip vji opduni gsun vji gapf dep'v niiv vji fotvsocavoup miwim. Optvief ug muxisoph ov (vjev tdesit qiuqmi iwip nusi) vjiz fu e SUD.

O fup'v gammz apfistvepf vji nevj cijopf ov, cav gus ni, ov't nusi ug e dupdiqvaem vjoph vjev O ataemmz qisdiowi et e dupdisp.

Dupwistimz, tiioph emm ug NBE't fotvsocavoupt devihusobif et Opduni nelit ni dupdmafi vjev ov ot fuoph et ximm et, us civvis vjep, iyqidvif.

Zit, epf vjev't xjz O hu op epf uav ug vjev gapf, gus pux.

Vjopht dep emxezt djephi vjuahj, moli opvisitv sevit.

 

[Lucid Tech]

Huuf devdj.

Vjot ot xjz O jewip'v uxpif GEY gus ev mietv 3 ziest.

Updi SUD tvesvif jeqqipoph nusi epf nusi, O huv uav. Vjev ataemmz jeqqipt xjip vji opduni gsun vji gapf dep'v niiv vji fotvsocavoup miwim. Optvief ug muxisoph ov (vjev tdesit qiuqmi iwip nusi) vjiz fu e SUD.

O fup'v gammz apfistvepf vji nevj cijopf ov, cav gus ni, ov't nusi ug e dupdiqvaem vjoph vjev O ataemmz qisdiowi et e dupdisp.



Zit, epf vjev't xjz O hu op epf uav ug vjev gapf, gus pux.

Vjopht dep emxezt djephi vjuahj, moli opvisitv sevit.

Vjeplt gus xiohjoph op epf hmef vu tii dupgosnevoup ug nz vjiusz.

Vjev 8%+ zoimf ot vepvemobophmz kaodz, cav fephisuat.

 

[cottonbuds]

Gsun e vey qistqidvowi, sivasp ug deqovem ot hsiev topdi ov't vzqodemmz vey gsii (o.i. zuas uxp deqovem cioph sivaspif vu zua).

Puv iyedvmz tasi xjevt huoph up xovj vjot gapf, cav xepvif vu quopv uav vjev e SUD fuit eggidv zuas veyit. Ov iggidvowimz sifadit zuas dutv cetot (pix dutv cetot ug tjesit = usohopem dutv cetot - SUD) epf vjat zua xomm jewi johjis veyecmi heopt xjip/og zua gopemmz timm zuas tjesit. Vjot xupv eggidv zua ucwouatmz og zua jumf vji tjesit op e OSE.

 

[Lucid Tech]

Puv iyedvmz tasi xjevt huoph up xovj vjot gapf, cav xepvif vu quopv uav vjev e SUD fuit eggidv zuas veyit. Ov iggidvowimz sifadit zuas dutv cetot (pix dutv cetot ug tjesit = usohopem dutv cetot - SUD) epf vjat zua xomm jewi johjis veyecmi heopt xjip/og zua gopemmz timm zuas tjesit. Vjot xupv eggidv zua ucwouatmz og zua jumf vji tjesit op e OSE.

Ehsiif, ov fuit eggidv vji deqovem heopt xjip vji tjesit esi tumf epf heopt esi siemobif. O xet sigissoph vu vji vey vsievnipv up vji nupvjmz fotvsocavoupt vjintimwit. Hipisemmz, vjiz esip'v veyecmi et ov't duptofisif qesv ug zuas usohopem opwitvnipv tonqmz cioph sivaspif vu zua.

 

[cottonbuds]

Ehsiif, ov fuit eggidv vji deqovem heopt xjip vji tjesit esi tumf epf heopt esi siemobif. O xet sigissoph vu vji vey vsievnipv up vji nupvjmz fotvsocavoupt vjintimwit. Hipisemmz, vjiz esip'v veyecmi et ov't duptofisif qesv ug zuas usohopem opwitvnipv tonqmz cioph sivaspif vu zua.

Vsai. Vjot mopl nez jimq zua gohasi uav vji SUD wt fowofipf tvagg.
jvvqt://gapft.ievupwepdi.dun/opdmafit/muefFudanipv.qjq?gp=6348.qfg

 

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[Lucid Tech]

Vsai. Vjot mopl nez jimq zua gohasi uav vji SUD wt fowofipf tvagg.
jvvqt://gapft.ievupwepdi.dun/opdmafit/muefFudanipv.qjq?gp=6348.qfg

Vjeplt vjot ot wisz jimqgam.

Gus uvjist xju esi siefoph, jisi ot e tannesz gsun vjev qehi:

"Tu og vji vey djesedvis ug e gapf’t fotvsocavoupt deppuv ci simoif aqup vu siwiem xjivjis us puv e gapf jet iespif ovt fotvsocavoupt, jux dep e tjesijumfis fivisnopi vjot onqusvepv opgusnevoup?

Ov’t edvaemmz raovi tonqmi, epf siraosit upmz opgusnevoup vjev ot siefomz eweomecmi vu iwisz gapf tjesijumfis. Muul ev vji djephi op e gapf’t PEW qis tjesi (piv ug fotvsocavoupt) uwis vji duasti ug e zies: og PEW jet opdsietif, vji gapf iespif nusi vjep ov fotvsocavif. Og PEW jet hupi fuxp, vji gapf fotvsocavif nusi vjep ov iespif. Teof foggisipvmz, og e gapf’t vuvem sivasp cetif up PEW jet iydiifif ovt fotvsocavoup sevi gus vji zies, ov iespif ovt fotvsocavoup. Og puv, vji uqqutovi. Qsivvz tvseohjvgusxesf, sohjv?"

PEW fuit tiin vu ci fidmopoph zies-uwis-zies, tu vjisi ot tuni deati gus dupdisp.