A lot of interesting things have occurred with the Boulder Growth and Income Fund (BIF) over the last couple of weeks. On February 8th Phillip Goldstein filed that Scott Schultz joined with him to support his proposals to let shareholders sell their shares at NAV. This gave them a combined ownership of over 28% of the fund. Then on February 23rd there was another filing that Scott Schultz sold all of the shares under his control, and that Phillip Goldstein then had shares amounting to just over 16.5% of the fund. This would appear to diminish the likelihood of Phillip Goldstein’s proposals being approved, but another filing on February 23rd showed that QVT Financial owned over 9.5% of the fund. My guess is that QVT will support the proposals.
In addition to the changing ownership developments, the fund’s board announced that they would consider a regular $0.10 per month distribution to shareholders, which the press release noted would amount to around a 16.7% distribution yield based on February 14th’s closing market price. This should help address the discount, but does not address the fund’s high expense ratio, or the portfolio manager’s poor performance history with this fund. Plus the distribution policy could be changed or eliminated at any time. Because of these issues, a liquidation or open-ending is still a better option for shareholders. The only way the $0.10 monthly distributions would be preferable to current shareholders would be if these distributions caused the shares to be bid up to an irrational premium a la the two Cornerstone funds. But it is better for a shareholder to receive NAV now rather than continue with the fund’s current management and hope that they get the chance to sell their shares at a premium to naïve investors who are chasing the fund’s “yield