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Douglas Albo  

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  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    Nothing but a disclaimer. Go back a year and its the exact same wording on all their distribution releases.

    http://bit.ly/WrN3jc
    Dec 19, 2012. 11:25 AM | Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    I would rather not show it on a reinvested basis either but that is all Y-Charts comes in. As long as the parameters are the same for all securities, then the argument is still sound. And the fact remains, investors could have reinvested the distributions and realized those returns.

    But for my own analysis, I don't assume reinvestment and the YTD market price performances in my table don't reflect it either. But then, total return market price performance is not nearly as important to me as NAV total return performance. It's just that readers want to know market price returns. But really, I'm watching these fund's NAV performances much more closely.
    Dec 19, 2012. 08:26 AM | 1 Like Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    Thank you! That is exactly why I write these articles.
    Dec 19, 2012. 07:56 AM | 1 Like Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    I worked at Smith Barney and Morgan Stanley for 16 years where I had many bond clients. I know how bonds work, thank you.

    My analogy, which was really about comparing two equity CEF income strategies, option income and dividend income, never mentions anything about stocks or bonds being bought and sold.
    Dec 19, 2012. 07:44 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    I'm not sure which earnings press release you're referring to but if you were referring to this...

    "The actual amounts and sources for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations."

    That is just a disclaimer they always put on in case their final determination for tax-purposes is different than what they give during the year.
    Dec 18, 2012. 04:15 PM | Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    Expense ratios in option-income funds are similar to actively managed mutual funds. Considering their significantly higher yields, I don't think these funds have excessive expense ratios.

    Premiums/discounts can go in cycles. Many funds rose from -25% discounts in the fall of 2008 to lofty premiums just a year later in the fall of 2009. When you add in appreciation, it was not unusual to see 100% moves.
    Dec 18, 2012. 01:27 PM | Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    Happens sometimes when the bottom falls out of CEFs. By far the best time to buy these funds. Last occurred in early August, 2011. I even wrote an article on it this go round...

    http://seekingalpha.co...

    Best guess is that there was an unwinding of a carry trade by some institution. Not a bad strategy when you can borrow at 1% and own 10% yielding funds. Either the fiscal cliff, higher taxes or higher rates probably spooked them.
    Dec 18, 2012. 12:57 PM | Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    If you've read my articles in the past, I like most of the Eaton Vance option-income funds except for ETJ and I like most of the Nuveen funds. A lot of it depends on where you think the markets are going. For more defensive option-income funds, ETV and ETW are good picks and go ex-div on Thursday. EOI is also doing well though EOS has been disappointing frankly. From Nuveen, I like JLA & JPG but they all went ex-div last week.

    For more upside capture, INB, EXG, and DPO are my favorites, but only EXG has not gone ex-div yet. A big plus for Eaton Vance is that all of their option funds are converting to monthly pay beginning in 2013.

    Total return NAV performance over different time frames is the best way to rate these funds.
    Dec 17, 2012. 11:18 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
    Broker end of year 1099's will typically identify your ROC portion in Box 3 as non-dividend distributions, but they don't call it ROC.
    Dec 17, 2012. 07:28 PM | 3 Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    You can't take the published UNII #'s and I'm not exactly sure where you are getting your ROC #'s since I don't see any SEC filing on JTD for 12/7. If you're getting that from CEFConnect, those ROC #'s are not correct since they are provisional (see below).

    Nonetheless, you have to dig deeper. Go to JTD's Semi-Annual report date 6/30/12. Go to page 21 and you'll see NII as $3,920,873. That's total dividend and interest minus all expenses, including interest expense. Now JTD paid out ($7,531,857) in distributions for the first 6-mos so it has to make up the ($3,610,984) difference via realized or unrealized appreciation. For the first 6-mos, JTD had $13,215,655 of realized and unrealized gains (bottom page 21) so obviously, it had way more than enough to pay for its distributions over the first 6-mos of 2012 so why were the distributions classified as mostly ROC? Go to page 28 and read this...

    "The distributions made by the Fund during the six months ended June 30, 2012, are provisionally classified as being “From and in
    excess of net investment income,” and those distributions will be classified as being from net investment income, net realized capital
    gains and/or a return of capital for tax purposes after the fiscal year end. For purposes of calculating “Undistributed (Overdistribution
    of) net investment income” as of June 30, 2012, the distribution amounts provisionally classified as “From and in excess
    of net investment income” were treated as being entirely from net investment income. Consequently, the financial statements at
    June 30, 2012, reflect an over-distribution of net investment income."

    This is a big reason why you have to follow a fund's NAV. If a fund's NAV is rising even while paying out its distribution, then there is no ROC per se, I don't care how they classify it. If a fund's NAV is depreciating while paying out its distributions, then that is true ROC. JTD's NAV started the year at $13.56. It's now $15.15, thus no ROC.
    Dec 9, 2012. 11:25 AM | Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    Thank you. Please see above...
    Dec 8, 2012. 01:31 PM | Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    And also see above...
    Dec 8, 2012. 01:30 PM | Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    And thank you for your comment. It's responses like yours that makes this worthwhile.
    Dec 8, 2012. 01:30 PM | Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    Just hedges. CEFs can be volatile and I use hedging to try and bring down volatility a bit. Don't usually hedge more than 1/3 of the total portfolio value and its currently a lot less than that.
    Dec 8, 2012. 01:26 PM | Likes Like |Link to Comment
  • Equity CEFs: Searching For The Right Balance Of Income And Appreciation Funds, Part II [View article]
    That's a good question. There's no K-1's which is a big advantage. You'll see your distributions on your year end 1099's identified in the 1099-DIV box as either ordinary dividends, which are reportable, or non-dividend distributions, which are not.
    Dec 8, 2012. 01:25 PM | Likes Like |Link to Comment
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