SUMMARY

We rate Kayne Anderson Energy Tot Ret at C+. Positive factors that influence this rating include a greater than above average total return and low price volatility. The fund invests approximately 87% of its assets in stocks and may be considered for investors seeking a Sector - Energy/Natural Res strategy.

POSITIVES AND RISKS

Total return ranks above peers over the last three years. The Kayne Anderson Energy Tot Ret has returned an annual rate of 10.56% since inception. More recently, the fund has generated a total return of 12.41% in the last five years, 14.07% in the last three years, and 8.23% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 76% of them. It has also outpaced 69% of its competitors on a three year basis and 48% of them over the last year for the period ending 2/28/2013. On a year to date basis, KYE has returned 17.20%.

Downside risk has been below average. KYE has a draw down risk of -24.72%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 21.5%. This fund has experienced a high level of volatility in its monthly performance over the last 36 months. As of 2/28/2013, the fund was trading at a price of $28.82, which is 0.5% below its 52-week high of $28.97 and 3.6% above its 52-week low of $27.83.

High expense ratio hinders performance. On total assets of $901.79 million, KYE maintains a high expense ratio compared to its Sector - Energy/Natural Res peers of 4.40% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As KYE 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 Kayne Anderson Energy Tot Ret has been managed by John C. Frey for the last 8 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 84% of other fund managers.