The scrutiny follows a report by The Bear Cave, which characterized the fund’s distribution model as a "Magic Money Machine." The report alleged that for eight years, the fund paid out $1.74 billion to shareholders while generating only about one-third of that amount in actual earnings. By consistently issuing new shares at a premium to net asset value, the fund allegedly masked its reliance on capital recycling. Former Guggenheim executives cited in the report further disparaged the portfolio as a "dumping ground" filled with illiquid, high-yield assets.

Hagens Berman partner Reed Kathrein is now leading an inquiry into whether Guggenheim Funds Investment Advisors and Guggenheim Partners Investment Management violated the Investment Company Act. The investigation seeks to determine if the firm failed to disclose significant liquidity risks and potential related-party transactions. As the fund's market premium compresses, the firm is evaluating whether the existing "at-the-market" issuance mechanism remains viable or if it has effectively stalled, leaving investors vulnerable to further volatility.