UPDATE: Bank of America Downgrades Kayne Anderson Energy Total Return Fund to Underperform on Stretched Valuation

Bank of America reduced its rating on Kayne Anderson Energy Total Return Fund KYE from Neutral to Underperform as the fund trades above net asset value currently. Bank of America said, "We view KYE's current valuation as stretched given 1) it trades at an 9% premium to its reported NAV (versus a historical average premium of 0%), 2) KYE has outperformed its peers - YTD as of 19 July 2012, KYE produced a total return of 11.8% versus 9.8/5.6% for the average Energy MLP CEF and Alerian MLP Total Return Index (AMZX), respectively, 3) lack of dividend growth (KYE has not raised its dividend since 3Q08), and 4) exposure to less attractive sectors compared to peers such as marine transportation and income trusts." Kayne Anderson Energy Total Return Fund closed at $27.31 on Thursday.