Source Capital, Inc. Year-End 2024 Commentary

2025-03-25 09:30:00 ET

Summary

• Source Capital Inc.'s NAV gained 0.19% for the quarter and 11.11% for the trailing twelve months, outperforming its primary benchmark.
• The Fund's equity exposure declined as valuations increased, reflecting a cautious approach amid high market valuations and investor complacency.
• High-yield debt is deemed unattractive due to narrow spreads, suggesting lower compensation for credit risks and potential mark-to-market risk.
• The Fund's diversified equity portfolio trades at a lower valuation with projected above-market growth, emphasizing thoughtful stock selection and international opportunities.

Dear Shareholder

Performance Overview

Source Capital Inc.’s (“Source” or “Fund”) net asset value (NAV) gained 0.19% for the quarter and 11.11% for the trailing twelve months, which is higher than the balanced MSCI ACWI/Bloomberg US Agg index, the Fund’s primary illustrative benchmark.

Performance versus Illustrative Indices (%) ¹

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