Ellsworth Fund Ltd was first formed in 1986 and has been continually managed by Dinsmore Capital Management. It is traded on the American Stock Exchange under the symbol ECF. As of December 16, 2011, its discount from net assets was 14.04 and its net asset value performance for one year was (5.091%).
As of September 30, 2011, ECF had net assets of $100,007,782 with no leverage. ECF had a capital loss carry forward of $ 9,180,088 and unrealized depreciation of $ 9,112,556. As you know, I regard carry forwards and depreciation as added bonuses.
Major allocations were as follows:
|Convertible bonds and notes||61.3%|
|Convertible preferred stock||14.2%|
|Short term investments||4.8%|
The three largest major industry exposures were as follows:
Its ten largest investment holdings, constituting 20.3% of assets, were as follows:
|AT & T||2.0%|
|10 Largest Holdings||20.3%|
For the fiscal year ending September 30, 2011, ECH had the following:
|Market value total return||(7.13%)|
|Net asset total return||(2.82%)|
|Net investment income||2.6%|
First Trust Portfolios owns 11 % of the outstanding shares and Relative Value Partners owns 6.1% of the shares.
I think these shares are well worth purchasing when the discount exceeds 15%. You are buying a diversified portfolio of convertible debt and preferred stock. The loss carry forward and unrealized depreciation adds to the attraction. Convertible debt is usually issued by financially weaker rather than stronger companies and the market has not been kind to them. With the discount, the investment income exceeds 3% of net asset value, offering a decent return while waiting for the economy to revive.
I again wish to stress that ECF should be part of a basket of several closed end funds which offer similar characteristics but have different investment philosophies and approaches.
Disclosure: I am long ECF.