A fund paying $0.20 quarterly at a $32 price shows a 2.5% distribution yield. Whether that is sustainable depends on what funded it: net investment income, realised gains, option premium, or capital.
Several structures routinely pay out more than they earn. Managed distribution policies target a fixed percentage of NAV regardless of income, and option-writing funds book premium as distributable while capping their own upside. Both can show attractive yields alongside a declining NAV.
Check the distribution's composition, published in fund reports, and compare NAV over multiple years. A high yield financed by return-of-capital is the investor's own money coming back, less fees.
Related: return-of-capital, closed-end-fund, reit, total-return, dividend