Shares of Guggenheim Strategic Opportunities Fund (NYSE: GOF ) are trading lower Thursday afternoon following a short report published by research outlet The Bear Cave. Here’s what investors need to know .
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The Bear Cave alleges that GOF’s long-standing dividend yield is built on an issuance model that is no longer sustainable. Over the past eight fiscal years, the fund distributed $1.74 billion to shareholders while its portfolio generated just $564 million in total earnings.
To fund the gap, Bear Cave alleges GOF relied on issuing billions of dollars in new common stock while trading at a premium to its net asset value. With the stock’s premium now compressing toward a discount, statutory guardrails restrict GOF from selling new shares to cover its payouts.
Guggenheim did not immediately respond to Benzinga’s request for comment.
Alleged Illiquid Assets and Distribution Risks
The report also raises flags over the fund’s underlying portfolio quality, quoting a former executive who described the holdings as illiquid and difficult to adjust during fund outflows. The report states approximately 15.5% of the fund’s net assets sit in Level 3 securities, which Bear Cave says rely on unobservable inputs and internal valuation models.
Latest Private Market Opportunities Join 400,000+ InvestorsAccording to the analysis, GOF’s recurring net investment income supports a monthly payout of roughly six cents per share, well below its current 18.21-cent distribution. Without fresh capital from share sales, the manager may be forced to cut the dividend or attempt asset sales.
GOF Shares Fall Thursday Afternoon
GOF Price Action: Guggenheim Strategic Opportunity Fund shares were down 5.65% at $9.52 at the time of publication on Thursday. The stock is trading at a new 52-week low, marking the lowest levels seen since 2009, according to Benzinga Pro data .
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