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Douglas Albo  

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  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    Hmm, I'll take you up on that offer!
    Jul 15, 2015. 09:46 PM | Likes Like |Link to Comment
  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    Can't really take a big position in HQH. I own HQH but I own a lot more GRX. HQH is too volatile and too sector specific, including private equity which is very risky due to liquidity. That being said, the performance of HQH and HQL has been off the charts. To a point where you wonder how much more biotech and healthcare can outperform like this.

    GRX you can take a big position in, in my opinion, because its 50% healthcare stocks and 50% consumer staple stocks, mostly food oriented. That's in keeping with its strategy to focus on the trend towards better nutrition and wellness as well as healthcare in general. GRX may not have the upside as HQH or HQL but its more diversified.

    On a broader note, I've never seen a market in which only a few sectors can dominate like this while every other sector is under pressure it seems (except small cap and some technology). This is NOT healthy and I don't think it can last despite this ever higher trend for biotech/healthcare.
    Jul 15, 2015. 11:24 AM | 2 Likes Like |Link to Comment
  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    Don't own CEFL for multiple reasons. Two layers of expenses and their top holdings change quite a bit. Last I looked, they owned a lot of fixed-income CEFs, which I certainly don't want to be in. I think you need to be wary of any fund that offers 2X the exposure as you take on quite a bit more risk. I don't need that high of a yield in the first place.
    Jul 14, 2015. 09:25 AM | 1 Like Like |Link to Comment
  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    Good question. The tax-managed Eaton Vance option funds sell index options, whereas EOI and EOS sell individual stock options. It's just a lot easier to tax-manage index options than individual options.

    In the tax-managed funds, there's no chance of positions being called away for a capital gain as settlements are in cash. However, the PM's might let stock get called away with EOI and EOS if they felt it wasn't worth buying back the options.

    Historically, there seems to be as much ROC in the EOI and EOS distributions as there are in the tax-managed fund's distributions so I don't think the tax-managed designation is necessarily exclusive to the tax-managed funds. ROC is generally the portion of the distribution that is not earned income (portfolio dividends/interest) or realized capital gains.
    Jul 13, 2015. 02:55 PM | 2 Likes Like |Link to Comment
  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    STK is kind of a rogue tech CEF and I never know quite how its NAV is going to perform compared to the NASDAQ-100. It can outperform, like more recently, and it can underperform like in 2012 & 2013. So the fact that its been trading at a premium over the past year makes me wary. I'm not saying you shouldn't own STK, but if you're going to take a large position in a tech CEF, I prefer QQQX since it tracks the QQQ's a lot more closely.
    Jul 13, 2015. 12:33 PM | 1 Like Like |Link to Comment
  • 2015 CEF Strategies: 1st Half Observations, 2nd Half Opportunities [View article]
    JCE historically uses long S&P 500 e-mini futures as well as writing options so it can certainly have more NAV upside than EOI during a bull market. I keep an eye on JCE and would have bought some on the recent dip but its NAV performance was not doing as well as I hoped, less than EOI's. Since then, it has rebounded and yes, I wish I had bought some.
    Jul 13, 2015. 12:20 PM | 1 Like Like |Link to Comment
  • Equity CEFs: Back Up The Truck On SCD [View instapost]
    Nope. CEFs with MLPs issue regular distributions reported on 1099's. No K-1s to deal with.
    Jul 1, 2015. 09:28 PM | Likes Like |Link to Comment
  • Equity CEFs: Back Up The Truck On SCD [View instapost]
    MLP income for these funds is always classified as ROC.

    Certainly, all funds go through periods in which their income does not cover their distributions but that's not the problem wih SCD. SCD has a very low NAV yield at 6.5% so covering its distribution (MLPs, utilities, REITs) is pretty easy compared to most CEFs.

    SCD is suffering from pure depreciation of assets since half its portfolio is in a bear market. The ROC percentage has nothing to do with that (again ROC comes from its MLP distributions) and would not change much whether the portfolio was appreciating or depreciating.
    Jul 1, 2015. 03:34 PM | 1 Like Like |Link to Comment
  • Equity CEFs: Back Up The Truck On SCD [View instapost]
    And tell me your understanding of what ROC is please...
    Jul 1, 2015. 02:13 PM | Likes Like |Link to Comment
  • Equity CEFs: Buy Alert On DSE Right Now [View instapost]
    Don't own DSE anymore. MLP CEFs are volatile enough as it is and DSE was one of the more volatile ones of the bunch. Its all about timing these funds but don't get married to them.
    Jun 11, 2015. 09:51 AM | 1 Like Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    The expense ratio is reflected in the fund's NAV. In other words, it is absorbed by the fund. So the NAV distribution rate is net of the expense ratio.

    Of course, the expense ratio has nothing to do with the market price (which is set by investors) so the market price distribution would also be essentially net of fees as well. Hope that makes sense.
    Jun 9, 2015. 03:38 PM | 3 Likes Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    Cuts have been increasingly common in muni CEFs for awhile now. My table above shows about half the funds with cuts over the past year and even a couple with raises.
    Jun 8, 2015. 06:58 PM | Likes Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    These funds tend to move up or down together so it isn't so much which fund you buy as when you buy it. That said, MHI has been at a premium for quite some time and has come down hard recently. I just happen to like funds at wider discounts if they are available.
    Jun 8, 2015. 06:53 PM | 5 Likes Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    Funds generally hold to maturity or when they are called so for CEFs, that would be their source. Usually the concern is that you replace higher coupon bonds with lower coupon ones and you either have to go farther out in maturity or go down in credit quality.
    Jun 8, 2015. 06:42 PM | 4 Likes Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    Thanks James! And continued success to you...
    Jun 8, 2015. 01:53 PM | 1 Like Like |Link to Comment
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