Tax-Efficient Dividends at Attractive Valuation: SRH Total Return Fund Overview

The SRH Total Return Fund offers a tax-efficient dividend strategy with an attractive valuation. The fund is a chef-selected menu item, hand-picked and crafted by a professional in the industry. It aims to provide a total return, including dividend income, with a focus on capital preservation. The fund's attractive valuation makes it an attractive investment option for those looking for a tax-efficient dividend strategy.

The SRH Total Return Fund (NYSE: STEW) is a closed-end fund (CEF) designed to provide investors with a tax-efficient dividend strategy. This fund, managed by Paralel Advisors and SRH Advisor, aims to deliver total returns, including dividend income, with a focus on capital preservation. The fund's attractive valuation makes it an appealing investment option for those seeking a tax-efficient dividend strategy.

Fund Overview and Performance

The SRH Total Return Fund was launched on January 31, 2022, and has since shown consistent growth. Over the last twelve months, the fund's share price has increased by approximately 15.7%, with a total return of 20.15% when including all distributions STEW: Tax-Efficient Dividends At An Attractive Valuation^[2]. The fund's total managed assets amount to approximately $2.35 billion, spread across 23 different positions STEW: Tax-Efficient Dividends At An Attractive Valuation^[2].

Investment Strategy and Risk Profile

The fund employs a bottom-up value approach to its investment process, focusing on identifying high-quality businesses that provide attractive total returns over the long term. The fund's top holdings include Berkshire Hathaway Class A & B (BRK.A/B), which account for 40.96% of the portfolio STEW: Tax-Efficient Dividends At An Attractive Valuation^[2]. This heavy concentration in Berkshire Hathaway means that the fund's performance is closely tied to the performance of this diversified holding company.

Valuation and Tax Efficiency

The SRH Total Return Fund currently trades at a discount to net asset value (NAV) of approximately 20.6%, one of the most favorable levels over the last decade STEW: Tax-Efficient Dividends At An Attractive Valuation^[2]. This discount to NAV provides an attractive entry point for long-term investors. The fund's distribution rate is modest, with an annualized forward rate of $0.66 per share, yielding 3.63% STEW: Better Off Just Buying Berkshire^[1]. A significant portion of the distributions comes from return of capital, which is tax-deferred and can lower an investor's cost basis over time. This tax-efficient dividend strategy makes STEW particularly suitable for taxable accounts.

Conclusion

The SRH Total Return Fund offers a tax-efficient dividend strategy with an attractive valuation. While the fund's heavy concentration in Berkshire Hathaway and relatively high expense ratio may limit its appeal to some investors, its consistent performance and tax-efficient distributions make it a solid choice for long-term buy-and-hold investors seeking a well-managed, diversified portfolio.

References

STEW: Better Off Just Buying Berkshire^[1] https://seekingalpha.com/article/4824947-stew-better-off-just-buying-berkshire
STEW: Tax-Efficient Dividends At An Attractive Valuation^[2] https://seekingalpha.com/article/4825341-stew-cef-tax-efficient-dividends-at-attractive-valuation