Bancroft Fund Ltd. is traded on the NYSE Amex Exchange under the symbol BCV. Since inception it has been managed by Dinsmore Capital Management. The fund invests almost exclusively in convertible securities. 10.7% of the shares are held by First Trust Portfolios LP in Wheaton, Illinois. As of January 10, 2012, BCV was trading at a 14.09% discount from net asset value. This discount has been higher.
BCV is not leveraged and its asset allocation is as follows:
| Convertible Bonds | 68.7% | $67,428,178 |
| Corporate Bonds | 0.2% | $ 225,000 |
| Convertible Preferred Stock | 14.3% | $14,023,879 |
| Mandatory Convertible Securities | 12.9% | $12,698,245 |
| Short Term Assets | 3.9% | $3,833,157 |
| Total Net Assets | 100% | $98,208,459 |
Operating ratios for last year were as follows:
| Expenses to Net Assets | 1.1% |
| Investment Income to Net Assets | 2.5% |
| Portfolio Turnover | 43% |
Performance has pretty much tracked the Indexes and is as follows for the past one year, five year and ten year periods:
| Market Price | 0.01% | 3.14% | 3.97% |
| Net Asset Value | 1.63% | 2.55% | 4.07% |
| Merrill Lynch U.S. Convertible Index | 1.03% | 3.03% | 5.61% |
| S & P 500 Index | 8.06% | 0.25% | 3.69% |
BCV has a well diversified portfolio with its ten largest holdings constituting only 22.1% of all assets. To give you a flavor, these holdings were as follows:
| EMC (EMC) | 3.1% |
| Intel (INTC) | 2.7% |
| Equinix (EQIX) | 2.4% |
| Chesapeake Energy (CHK) | 2.3% |
| Nuance Communications (NUAN) | 2.3% |
| Wells Fargo (WFC) | 2.2% |
| Vale S.A. (VALE) | 1.9% |
| SBA Communications (SBAC) | 1.8% |
| Gilead Science (GILD) | 1.7% |
| General Motors (GE) | 1.7% |
BCV is also broadly diversified, with its ten largest industries, constituted only 76.1% of its assets, as follows:
| Energy | 11.9% |
| Telecommunications | 10.2% |
| Pharmaceuticals | 10.1% |
| Financial Services | 8.6% |
| Semiconductors | 8.0% |
| Computer Software | 6.6% |
| Banking/ Savings and Loan | 6.1% |
| Metals and Mining | 5.5% |
| Healthcare | 5.3% |
| Computer Hardware | 3.8% |
BCV is a nice fund which should be bought at discounts of 14% and above. It is rock solid and does the job it is intended to do. It should be in most investor's portfolio, especially those who seek a modicum of income.
Disclosure: I am long BCV.
