We rate DNP Select Income Fund Inc at B-. Positive factors that influence this rating include a well above average total return and low price volatility. The fund invests approximately 71% of its assets in stocks and may be considered for investors seeking a Sector - Utilities strategy.
POSITIVES AND RISKS
Total return ranks very high in comparison with peers over the last three years. The DNP Select Income Fund Inc has returned an annual rate of 8.52% since inception. More recently, the fund has generated a total return of 8.97% in the last five years, 7.56% in the last three years, and -0.95% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 83% of them. It has also outpaced 80% of its competitors on a three year basis and 54% of them over the last year for the period ending 7/31/2021. On a year to date basis, DNP has returned -9.55%.
Downside risk has been below average. DNP has a draw down risk of -23.87%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 15.5%. This fund has had moderate volatility in its monthly performance over the last 36 months. As of 7/31/2021, the fund was trading at a price of $10.62, which is 0.7% below its 52-week high of $10.70 and 1.9% above its 52-week low of $10.42.
High expense ratio hinders performance. On total assets of $3.31 billion, DNP maintains a high expense ratio compared to its Sector - Utilities peers of 1.84% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As DNP is a closed end fund, it has no front end or back end load.
Manager tenure and performance record are net positives. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The DNP Select Income Fund Inc has been managed by Nathan I. Partain for the last 26 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 59% of other fund managers.
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