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Douglas Albo

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  • 2 High-Yield Investments To Increase Income While Waiting On Dividend Growth [View article]
    Hmm, I have ETO's NAV up 11.9% YTD and yet it's paid only 1/4 of its annual distribution, or only about 1.6% of its NAV yield of 6.3%. Sounds to me like YTD, ETO is covering its distribution by a wide margin.

    Which is why its tough to cherry pick short term periods, because you can show whatever you want. From the market low on March 9, 2007, ETO's NAV is up 125% ($22.12 current NAV + $4.44 total distributions - $11.78 NAV on 3/9/09 divided by $11.78). If you think that is a "disaster", ETO's market price is up 167% from the market lows ($19.34 current price + $4.44 total distributions - $8.92 market price on 3/9/09 divided by $8.92).

    I'll take that "disaster" any day!
    May 1 11:20 PM | Likes Like |Link to Comment
  • 2 High-Yield Investments To Increase Income While Waiting On Dividend Growth [View article]
    ETO a disaster? Hardly. First of all, ETO, ETG & EVT are all leveraged CEFs from Eaton Vance and have virtually all ordinary income distributions, i.e. no ROC. The Eaton Vance funds which do have high ROC are MANAGED THAT WAY. Hence, why most include "tax-managed" in their name.

    For disclosure purposes, I don't own nearly as much of the EV option-income funds because leveraged funds are where you want to be in this market but I also wouldn't make blanket statements about any one firm either. The EV option-income funds ETB & ETV are as good as ANY equity CEF out there and their NAV performance since their inceptions prove it. The only real disaster among the EV funds is ETJ.
    May 1 07:27 PM | 1 Like Like |Link to Comment
  • Equity CEFs: When Premiums And Discounts Belie Good And Bad Funds [View article]
    Well, according to the Gabelli website, GRX has a 1% management fee which is about average plus a 1.1% other expenses, or 2.1% overall. I don't like high fees either but I think in this case, one could argue that its acceptable.

    http://bit.ly/J5fuJ4

    Then go to Fund Details
    Apr 30 01:34 PM | Likes Like |Link to Comment
  • Equity CEFs: When Premiums And Discounts Belie Good And Bad Funds [View article]
    Thank you! I just believe there are so many other equity CEFs that have had excellent NAV performances that trade at discounts, that I wonder what someone sees in an IID. I've said the same thing about AGD but obviously, these funds find support somewhere because they continue to trade with high valuations. I often wonder where this support comes from because any institution that did its due diligence would see these anomalies and would look at alternative funds.
    Apr 30 12:54 PM | Likes Like |Link to Comment
  • Equity CEFs: When Premiums And Discounts Belie Good And Bad Funds [View article]
    Leveraged funds have higher fees because of the cost of leverage. That's the price you pay for higher potential returns. PIMCO also has a fund, PGP, at an even higher 68% premium with a 2.8% fee.

    The problem with these high premium funds is that their NAV yields are exorbitant. In other words, PHK is having to support almost a 19% yield ($1.46 annual distribution divided by $7.86 NAV) but new investors are only getting an 11.2% market yield! Eventually, investors in these funds are going to realize the high price they are paying but that will only happen when PIMCO finally cuts the distributions. May not happen for awhile, but it WILL happen, even to PIMCO.
    Apr 30 12:42 PM | Likes Like |Link to Comment
  • Equity CEFs: When Premiums And Discounts Belie Good And Bad Funds [View article]
    If IID was achieving its goals, it would not have cut its distribution. The fact is, almost all global option-income funds trade at discounts and many have had superior NAV performance than IID.

    If it wasn't for IID's exceptionally small market cap and odd trading support, it would be at a discount too.
    Apr 30 11:10 AM | Likes Like |Link to Comment
  • Equity CEFs: Which Fund Would You Rather Own? [View article]
    There's maybe a dozen large investment advisory firms that focus in CEFs but the drivers of CEF moves up and down are the banks and brokers like Morgan Stanley. Though CEFs are more concentrated in the hands of individual investors than most other security classes, I still believe it is the banks and brokers that dictate the price movements.

    I don't think you'll find confirmation of CEFs showing up in more and more institutional portfolios if that is what you are looking for. Most CEFs are just not liquid enough.
    Apr 18 01:05 PM | Likes Like |Link to Comment
  • First Quarter Equity CEF Performances And Review [View article]
    Thank you! The tables take a lot of time but I believe they are exceptionally valuable.
    Apr 18 10:31 AM | Likes Like |Link to Comment
  • Equity CEFs: Which Fund Would You Rather Own? [View article]
    Total return is cumulative from the start date with all distributions added back.
    Apr 17 12:17 PM | Likes Like |Link to Comment
  • Equity CEFs: Which Fund Would You Rather Own? [View article]
    CHW is about 40% fixed income and about half of its equity portfolio is US stock based. There's not really any ETF that covers all of those bases that I'm aware of and you probably wouldn't be able to short it anyway so I still would go for something big and liquid like the S&P 500 ETF or SPY. If its a retirement account, then you can buy the inverse SH. If you're bearish on Europe, then IEV is a good hedge and only pays a dividend twice a year vs. SPY which is quarterly. I wouldn't hedge more than 1/3 of any long position.
    Apr 13 08:40 AM | 1 Like Like |Link to Comment
  • What Other Equity CEFs Are Overdue For Distribution Cuts [View article]
    Just about every statement you said is in error. First of all, you shouldn't compare equity CEFs with fixed income CEFs. Two completely different asset classes. ETV is an option-income fund and does NOT use leverage, unlike many of the fixed-income funds you mentioned.

    Second, ETV's distributions are mostly ROC, which is NON-taxable. That's a tax-advantage! And finally, on performance, ETV's NAV if you added back all of its distributions would be $26.19 from inception at $19.06 on 6/27/05. That's over a 37% total return, which beats the S&P 500 pretty handily, even with dividends for the S&P 500.

    Ever try selling a covered-call option on a stock you own? Annualized, you can realize 15% to 20% "yields" if you wrote options every month and the options expired worthless. Now do you believe those yields on covered-call option income CEFs are unrealistic?
    Mar 28 09:18 AM | 2 Likes Like |Link to Comment
  • What Other Equity CEFs Are Overdue For Distribution Cuts [View article]
    I'm still long BGY but it was mentioned only in passing in the article. ETW and BGY are similar as global option-income funds though ETW is more defensive selling 95% index option coverage on its global stock portfolio whereas BGY sells only about 50%. ETW has had better NAV performance historically though BGY probably gets the nod in a more bull market environment.
    Mar 12 08:21 AM | Likes Like |Link to Comment
  • What Other Equity CEFs Are Overdue For Distribution Cuts [View article]
    Hah! Thanks but she makes me look old by comparison!
    Mar 10 10:37 AM | Likes Like |Link to Comment
  • What Other Equity CEFs Are Overdue For Distribution Cuts [View article]
    The numbers don't lie. EOD has been a laggard. The 100% ordinary income distributions are actually a liability compared to option-income funds that have high ROC, and often show better total return performance.

    EOD includes about 20% fixed income in its portfolio and some high yielding stocks in the financial and utility sectors which helps their ordinary income component, but they also are not managing their options strategy to take advantage of ROC. Compared to high ROC component option-income funds like ETW, ETV and ETB from Eaton Vance, EOD's total return is not even close to those funds. How do you explain that if you are only judging funds by their 100% ordinary income distributions? Feel free to check Morningstar as well.
    Mar 10 10:31 AM | Likes Like |Link to Comment
  • Equity CEF Analysis: BlackRock International Growth And Income Trust [View article]
    Generally, I would recommend buying ahead of the ex-date but if you want to average down, you could take a half position before and a half position after. It doesn't really matter if the account is an IRA or not. One of the advantages in a taxable account is that alot of option-income funds have a high Return of Capital component in their distributions which is non-taxable in the period received, though you would need to reduce your cost basis by the ROC amount. Check with your accountant.
    Mar 7 09:17 PM | Likes Like |Link to Comment
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