High-yield positions earn their place through total return, not just distributions. The Annual Audit Workbook gives you the coverage ratio worksheet, NAV scorecard, and growth tracker to know — precisely — whether each Tier 3-5 position is still justifying its allocation.
The same NAV erosion that's tolerable in a 10% portfolio position becomes critical at 25%. The NAV Stability Scorecard quantifies risk by position, not just in aggregate.
Coverage ratio declines, distribution frequency changes, and NAV acceleration all precede formal cuts. The worksheets track all three.
High-yield investors often know distribution totals. Fewer track total return — distributions plus NAV change — for each holding. This workbook does both.
Chapters marked Most Relevant are specifically applicable to your situation.
The specific cases where quarterly auditors caught NAV erosion 6 months before it became critical.
A systematic review process for every position: yield, NAV change, coverage ratio, total return.
How to calculate and track coverage ratios for each holding, with thresholds.
A scoring system for each holding based on 12-month NAV trend and volatility.
How to track whether income is growing, flat, or declining on a position-by-position basis.
For REITs, BDCs, and MLPs — how to evaluate whether distributions are sustainable.
A visual framework for deciding when to hold, trim, or exit a position.
How to track whether total portfolio income is growing, and by how much.
Quarterly high-yield review
The worksheets track coverage ratio changes, distribution frequency, NAV trends, and total return for each high-yield position.
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