Growth is nice, but a hefty, reliable income stream from a CEF that is close to an attractive entry point for purchase should suit practically any investor in these interesting economic times. The Alpine Global Dynamic Dividend Fund (AGD) offers a unique and balanced approach to optimizing both taxable dividend income and long term capital growth. The fund manager uses a primarily international-based security spectrum to find exceptional dividend opportunities for investors employing a multi-cap, multi-sector and multi-style investment approach. Anything goes investing, for you novices.
Trading at a modest premium to asset value at $19.35, the fund is down from a high of $25.50 last summer. AGD's market cap is approximately $458m and the average volume is about 66,000 shares per day.It started operation as a CEF on July 26,2006. Here is the best part-the current yield is 10.54%.
Surprisingly, I see no gimmicks to juice the yield. In fact, Alpine issued a recent press release stating that "The Alpine Global Dynamic Dividend Fund operates without any auction rate securities or long term leverage of any kind. The fund has distributed high current income monthly without the use of leverage like auction rate securities." Although management would not release their daily holdings to me, the most recent published portfolio is a stew of interesting securities that I have not found in other funds.
AGD issues dividends monthly and capital gains in December using tax managed techniques. The approximate balance of this fund is 20% US-80% non-US. Currency is hedged to a degree.I do not see securities worth mentioning that give one pause (overweighted financials, mortgage-based securities,etc.) to question the quality of the high income distribution. The decline in the funds price has stopped and stabilized over the past month, which indicates that the current portfolio quality is not an issue. AGD continues to distribute exceptional monthly income returns to the investor.
Maybe I am missing something, but the Alpine Global Dynamic Dividend Fund appears to be a great CEF that pays an outstanding dividend and is minded by competent and watchful management. I generally do not purchase or recommend CEFs that trade at a premium to asset value. However, given the yield and management track record attracting $12b in assets through their successful wealth management program, I think investors should consider this income machine for their portfolio.
Based in Westchester, NY, Alpine Woods Capital Investors was founded in 1997.
Full Disclosure: The author holds a position in AGD.