The Equus Total Return Fund (NYSE:EQS) announced yesterday that it will implement a managed distribution policy of $0.125 per quarter, starting with the November distribution. Based on recent market prices, the distribution yield for EQS will initially be over 6%. EQS is famous for consistently being near the top of the list of the most heavily discounted funds on ETFconnect and CEFA.com, so it will be interesting to see how the new distribution policy affects its discount.
The discount as of the close prior to the announcement was almost -27%, and I wouldn't be surprised if this narrowed some. I considered buying shares as a short term investment, but am holding off, at least for now, because I'm not sure if the distribution yield will be high enough to significantly lower the discount. However, for current shareholders of EQS who liked the fund before, the new distribution policy is definitely good news.
EQS 1-yr chart: