Our latest "Pick of the Month" is Liberty All-Star Growth Fund, Inc. (ASG), notes Marty Fridson, dividend expert and editor of Forbes/Fridson Income Securities Investor.
Liberty All-Star Growth is a non-leveraged equity fund that focuses on three growth style strategies — Small-Cap Growth, Mid-Cap Growth and Large-Cap Growth. The three strategies are managed by three separate fund managers.
All-Star Growth's primary objective is to seek long-term capital appreciation, with total assets dispersed fairly equally across the fund’s three growth strategies.
The fund’s sector breakdown as of 12/31/20 was dominated by Information Technology (30.2%), Healthcare (24.8%), Consumer Discretionary (13.6%), Industrials (11.4%), and Financials (7.5%).
Its top 5 holdings recently were Chegg, Inc. (CHGG), Progyny, Inc. (PGNY), Paylocity Holding Corp. (PCTY), FirstService (FSV) and Nevro Corp. (NVRO), at 1.9%.
Its distribution policy is to make a quarterly cash distribution on its shares amounting to 8 percent of the fund’s net asset value per year. The fund paid an extra $0.12 cash distribution for the January 2021 quarterly pay period, as well as its regular quarterly $0.14 dividend.
Performance historically has been strong, with ASG posting a market price total return of 46.65% for full-year 2020. This closed-end fund is suitable for low- to medium-risk taxable portfolios, as distributions are largely taxed at the 15%-20% rate. Buy at $11.50 or lower for a 4.87% annualized yield.
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