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Douglas Albo

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  • Equity CEFs: 1st Quarter 2014 Review - A Change In Leadership [View article]
    I generally don't like the fund of funds approach since 1). it adds an additional layer of fees and 2). I don't believe you need that much diversification. That said, CEFL offers 2X the exposure of its component CEFs at a 0.50% annual fee plus a leverage cost. I don't have the prospectus, but it looks like leverage is based on the 3-month LIBOR plus a spread.

    Though CEFL offers an extremely generous yield with an overall expense ratio that would be significantly less than if an investor tried to replicate the fund's strategy, I personally would wait until there is more of a track record. You don't get that kind of a yield without taking on an enhanced level of risk and CEFL can also invest in leveraged CEFs, which are themselves much riskier.
    Apr 6 10:58 AM | 1 Like Like |Link to Comment
  • Equity CEFs: 1st Quarter 2014 Review - A Change In Leadership [View article]
    Oh yes, still hold the Eaton Vance option-income funds though I have lightened up on ETV & ETB, which have gotten pricey. Don't even own EXG anymore. Biggest positions are ETY, EOI & EOS now. ETW is looking better and I would buy below $12.
    Apr 1 10:53 AM | Likes Like |Link to Comment
  • Equity CEFs: 1st Quarter 2014 Review - A Change In Leadership [View article]
    They base the expense ratio on the net assets. Go to latest annual report and $2,944,666 total annual expenses (includes interest) / $142,058,456 net assets = 2.07%. However base the expenses on total assets (includes borrowed amount) of $194,410,993 and expense ratio drops to 1.5%.

    I think the 1.5% is a more appropriate expense ratio since you wouldn't have to incur an interest charge if you didn't leverage the portfolio, right?
    Apr 1 10:22 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: A Fund Which Probably Should Just Go Open-End [View article]
    From the NIE/NGZ merger registration statement...

    "The Funds’ Board of Trustees regularly monitors the relationship between the market price and net asset value of the common shares. If a Fund’s common shares were to trade at a substantial discount to net asset value for an extended period of time, the Board of Trustees may consider the repurchase of such Fund’s common shares on the open market or in private transactions, the making of a tender offer for such shares or the conversion of such Fund to an open-end investment company. The Funds cannot assure you that their Boards of Trustees will decide to take or propose any of these actions, or that share repurchases or tender offers will actually reduce any market discount.

    If a Fund were to convert to an open-end company, such Fund’s common shares likely would no longer be listed on the NYSE. In contrast to a closed-end investment company, shareholders of an open-end investment company may require the company to redeem their shares at any time (except in certain circumstances as authorized by or under the 1940 Act) at their net asset value, less any redemption charge that is in effect at the time of redemption.

    Before deciding whether to take any action to convert a Fund to an open-end investment company, the Board of Trustees would consider all relevant factors, including the extent and duration of the discount, the liquidity of the Fund’s portfolio, the impact of any action that might be taken on the Fund or its shareholders, and market considerations. Based on these considerations, even if a Fund’s common shares should trade at a discount, the Board of Trustees may determine that, in the interest of the Fund and its shareholders, no action should be taken."

    Not saying its likely but I do feel Allianz needs to do something.
    Mar 25 01:36 PM | Likes Like |Link to Comment
  • Equity CEFs: A Fund Which Probably Should Just Go Open-End [View article]
    It's really a non-event in the scheme of things.
    Mar 14 06:38 PM | Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    Nuveen runs JSN, JLA, JPZ and JPG very conservatively and this is not a great market for JSN, JLA & JPZ because they are so defensive. JPG can capture a bit more NAV upside in a strong market, but not much.

    So Nuveen tweeked the funds distributions down a bit for the year because they probably have some formula they use to ensure a certain NAV coverage based on their market outlook. I'm not too worried about it and the market didn't seem too worried about it either. These funds are the most "bond like" of any pure equity CEFs and are not designed for a strong bull market. Their NAVs were only up 13%-15% in 2013, well below the market considering their pure stock portfolios.
    Mar 13 08:57 AM | Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    Liquid? Maybe in dollar volume but if there is any kind of seizure in the marketplace, forget about your mark-to-market price. Just how many dealers do you think there are in MBS? Not only that, they are very sophisticated and well informed. On the other hand, CEFs are mostly owned by retail investors, who are generally not very well informed.

    I'm sorry, but book value in REITs and NAV in CEFs are not the same thing.
    Mar 11 10:19 AM | 4 Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    Not really. You couldn't rely on the "book value" of an mREIT, a bank or any other security as its liquidation value whereas with equity CEFs, the NAV would be very representative of its liquidation value.
    Mar 10 04:55 PM | Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    I've written many articles on ROC so I think I understand the subject well thank you. It was more a rhetorical question to see what your understanding was since many investors don't realize that ROC can actually be an advantage and that fund sponsors will even try to maximize ROC at really no cost to the fund's performance.
    Mar 5 04:27 PM | 10 Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    I think you misread the article. I'm not endorsing GAB and am actually short a little. But what is wrong with Return of Capital anyway?
    Mar 4 11:03 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    Easy to say in a ramp-up market, but unfortunately, I have fiduciary responsibilities to clients and can't simply buy something just because its outperforming.
    Mar 4 10:51 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: Sell This, Buy That From These Fund Families [View article]
    HQH & HQL have been great funds. I know since I own both but they also include private equity which are not as easy to rely on in determining NAV compared to publicly traded Level 1 securities. As a result, HQH and HQL are significantly more risky than GRX.

    And as I put in my article, GRX's market yield is now 4.6% (($0.12x4)/$10.45) not 3.8% shown on CEF Connect.
    Mar 3 11:29 AM | 3 Likes Like |Link to Comment
  • CEF Strategies: Forget 1929, Why 2014 Is More Like 2000 [View article]
    Good question. The 1X Proshare inverse funds are pretty well correlated with their benchmarks but over time, the Ultra 2X and 3X are not. The longer the period, the more the 2X and 3X funds tend to lose their ultra inverse correlation. Maybe not a problem for short term holds, but I wouldn't recommend for a long term hold.
    Feb 27 11:35 PM | Likes Like |Link to Comment
  • CEF Strategies: Forget 1929, Why 2014 Is More Like 2000 [View article]
    I don't really follow fixed-income CEFs.
    Feb 21 08:18 PM | Likes Like |Link to Comment
  • CEF Strategies: Forget 1929, Why 2014 Is More Like 2000 [View article]
    If you want some downside protection, I would hedge with either shorting some ETFs or go long some inverse Proshare ETFs. I'm using the small and mid cap ETFs like IWM, IWO and MDY as hedges right now or you can go long Proshare's RWM or MYY for a retirement account. I use them mostly as insurance policies and don't necessarily expect to make money on them.
    Feb 21 08:02 PM | Likes Like |Link to Comment
COMMENTS STATS
581 Comments
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