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Douglas Albo  

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  • Equity CEFs: How To Play Sector Rotations By Investing In CEFs [View article]
    Really? The first four columns in the tables identify the fund's income strategy, i.e. light blue, orange, olive green and purple. The green and red you'll find in the rest of the columns and those relate to a fund's performance and other statistical attributes.
    Feb 21, 2015. 09:28 AM | Likes Like |Link to Comment
  • Equity CEFs: How To Play Sector Rotations By Investing In CEFs [View article]
    CEFs that sell individual stock options will require more oversight and will generally be more likely to either outperform or underperform their benchmarks by a greater degree I have found. What hurts these funds is if there is a wide variance in performance of their top holdings.

    CEFs that sell index options are more predictable and as long as their top holdings are keeping pace or outperforming their benchmarks, then they should do well.

    I generally like the index option approach as it requires less management. The difference in yields or tax efficiency seems to be negligible or probably just not enough of a factor.
    Feb 19, 2015. 08:56 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    None of these leveraged funds have enough net income to cover their distributions, particularly ETO with its increased distribution yield now. But ETO has been cashing in long term gains so it isn't showing any ROC. ETO had a $0.917/share capital gain distribution last year, whereas ETG and EVT have taken none. So in my opinion, ETG and EVT are much more attractive than ETO if the markets continue their uptrend.
    Feb 14, 2015. 10:23 AM | 1 Like Like |Link to Comment
  • GAMCO Global Gold, Natural Resources & Income Trust And GAMCO Natural Resources, Gold & Income Trust: Is It Time To Sell? [View article]
    I've been writing on CEFs since 2011 and have been following these and other funds for much longer than that. I wrote about GGN and GNT right at the end of last year noting their tendency to reverse course at the beginning of the year...

    http://seekingalpha.co...
    Feb 7, 2015. 10:55 AM | Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    Absolutely it should. I have asked, no...begged, Gabelli to give us some updates on the fund but to no avail. The fund should be fully invested by now and we should hear something in late February about any initial distribution declaration for the 1st qtr, but for the most part, Gabelli leaves you wondering what is going on.

    For a small/mid cap fund, the NAV hardly budges though it is a global value fund so perhaps its just not going to have the NAV upside as a US based small/mid cap fund. I'm waiting for Gabelli to come out with some more color on the fund before I decide what to do with it. Overall, I have not been impressed.
    Feb 7, 2015. 08:16 AM | Likes Like |Link to Comment
  • Equity CEFs: Will 2015 Be The Year Of The Rotation? Part II [View article]
    If you read my December 29th article, you would have known that it was EXACTLY because of the overshoot that I recommended both GGN & GNT, regardless of how gold & commodities performed.

    I'll take a 14.9% total return for GGN and a 9.2% total return for GNT (both also paid a $0.07 distribution) in a little over a month any day compared to a down market!
    Feb 3, 2015. 06:55 AM | 4 Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    Like ROC, its too simplistic to say that negative UNII is a bad omen.

    You have to understand where UNII comes from and most investors use CEF Connect to find out that info. But what you really need to ask is where does CEF Connect get that info? Well, it comes from the fund's latest annual or semi-annual report. So if we know where it comes from then all we have to do is see how they calculate it.

    If you go to a fund sponsor's webpage or SEC filings, just look for the latest report and go down to the statement of operations. Its not difficult to find a fund's Net Investment Income (NII) after expenses and compare that to what the fund paid out in distributions. Quite often, they'll even have a line item for UNII. Then just divide by the number of shares outstanding and voila, there's your UNII per share shown on CEF Connect.

    Just remember though, NII does NOT include options, so any income from a fund's option-writing is not even included in NII. Since most option-income funds rely on their option-writing and not portfolio dividends or interest, UNII is almost always negative.

    Also keep in mind that most leveraged CEFs don't cover their distributions with dividends and interest either, though certainly they rely more on this. Most leveraged CEFs also need portfolio appreciation to cover their distributions and this is why leveraged CEFs are better bull market funds than option funds. But this is why UNII, like ROC, is not necessarily a good indicator for how a fund is performing. You have to dig deeper.
    Jan 31, 2015. 12:44 PM | 3 Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    I would pay less attention to ROC and more attention to the direction of a fund's NAV. A fund can still be claiming partial ROC in their distributions even while their NAV is growing (ETG for example). ROC in itself, is actually a good thing because it is tax-deferred, but when it results in continued NAV loss over time, then its called destructive ROC and that's not good.

    AGD and AOD never actually showed any ROC when they relied on a dividend capture strategy because it was all earned income (portfolio dividends). That's why they rose to such extreme premiums. Everyone thought they were brilliant offering tax-advantaged income with no resulting ROC.

    But what was happening was that they were devastating their NAV in the process so they should have called it "Return of NAV" instead of ROC and as a result, their market prices eventually collapsed.

    But that's all history now and as long as AGD and AOD can cover their NAV yield (6.8%) with their new and improved income strategy, then no NAV loss and no ROC (doesn't mean they can't still claim ROC in their distributions from past realized losses).
    Jan 28, 2015. 07:26 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Will 2015 Be The Year Of The Rotation? [View article]
    RA - I have NO control over comments and have NEVER asked Seeking Alpha to remove or alter comments. None of this is as big of a deal to me as you seem to think it is.
    Jan 28, 2015. 06:52 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    FEZ and IEV are very similar and roughly the same size in ETF assets. You could use either one but IEV is more diversified with 350 stocks spread among the European markets vs. FEZ with only 50. So I would consider IEV more comparable to an S&P 500.
    Jan 27, 2015. 08:07 AM | Likes Like |Link to Comment
  • Equity CEFs: The Dilemma Of The Equity Option Income Strategy [View article]
    Agreed. I'd like to see it happen. They would be the third to go monthly after EV and BlackRock.
    Jan 13, 2015. 08:48 AM | Likes Like |Link to Comment
  • Equity CEFs: The Dilemma Of The Equity Option Income Strategy [View article]
    Better defensive portfolio? The new BXMX is very defensive.
    Jan 12, 2015. 01:36 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: The Dilemma Of The Equity Option Income Strategy [View article]
    1). No, not really. You just have to watch the NAV. If its growing even after distributions, then everything else is background noise.

    2). All bets are off because a fund sponsor might cut the distribution. The option income won't be that dramatically affected in a market downturn since PM's can tweek the income but a continued deterioration in NAV between paying distributions and portfolio depreciation may force fund sponsors to cut if it continued for a year or two.

    But that's not such a big deal and CEFs will often rally after a distribution cut if the fund has already dropped to a sizeable discount. I would much rather see a fund sponsor be proactive and cut the distribution to get it back down to a lower NAV yield than see a fund keep paying a distribution it can't support.
    Jan 12, 2015. 12:23 PM | 3 Likes Like |Link to Comment
  • Equity CEFs: The Dilemma Of The Equity Option Income Strategy [View article]
    1). UNII is irrelevant in option CEFs because it doesn't include the option income, only portfolio dividends and interest. It's almost always negative in option CEFs.

    2). All funds go through periods in which their income doesn't cover their distributions. The key is whether a fund can reasonably be expected to cover its distributions over time. 7% to 9% NAV yields are pretty safe, much more so than 10% to 12% NAV yields, but of course, in an extended downturn or a bear market, all bets are off. If an NAV yield creeps up closer to 12% because of a market downturn then yes, I would be concerned.
    Jan 12, 2015. 11:48 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: Will 2015 Be The Year Of The Rotation? [View article]
    I put out several articles in 2013 on muni CEFs and I took a significant position in them between mid to late 2013, which I still hold.

    http://seekingalpha.co...

    http://seekingalpha.co...

    http://seekingalpha.co...

    But if you must know, the reason why I don't include fixed-income CEFs in my writings is because you can't necessarily rely on their NAVs, which can be level 2 or even level 3 securities, i.e. without the depth of market participants as level 1 securities.

    Equity CEFs, on the other hand, have generally reliable NAV's because they own mostly stocks, which are level 1 securities.
    Jan 7, 2015. 09:55 AM | 2 Likes Like |Link to Comment
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