KIO: Income May Increase Going Forward, But The Distribution Is Destroying NAV

Impact · against what's priced in

KIO faces downward pressure as its high distribution yield is revealed to be destructive to NAV, eroding capital rather than reflecting sustainable earnings. While the floating-rate portfolio provides a modest hedge against rate hikes, it is insufficient to offset the negative impact of an unsustainable payout policy.

KIO−0.70

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In context

The fund is paying out more than it earns, leading to NAV erosion and price declines that lag its peers, outweighing the modest benefit of its floating-rate assets.

Read from the article alone

• rates▲35%
• fed▲24%
• KIO
• dividend yield
• income fund
• junk bonds
• kkr
• nav erosion