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Douglas Albo  

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  • Equity CEFs: The Best Return-Of-Capital Funds, Part II [View article]
    I think just about every fund hit their widest discounts in years last December during tax-loss selling season.
    Nov 7, 2012. 08:08 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The Best Return-Of-Capital Funds, Part II [View article]
    Undistributed Net Investment Income is not applicable to option-income funds because they rely on options, not dividends. Net investment income only looks at dividends and interest over a period, subtracts the funds expenses (management fees, etc.) and divides by the # of shares. Thus, most option-income funds have negative UNII. It's pretty easy to figure out from any fund's Annual or Semi-Annual reports.
    Nov 7, 2012. 08:06 AM | Likes Like |Link to Comment
  • Equity CEFs: The Best Return-Of-Capital Funds [View article]
    Thank you, but it will only be seminal if my articles make a difference to investors...something that only time will tell.
    Nov 6, 2012. 11:49 PM | Likes Like |Link to Comment
  • Equity CEFs: The Best Return-Of-Capital Funds [View article]
    That's great financial planning! Congratulations.
    Nov 6, 2012. 11:40 PM | Likes Like |Link to Comment
  • Equity CEFs: The Best Return-Of-Capital Funds [View article]
    Do you always take things at face value? If you read Eaton Vance's white paper, you'll read that ROC is a tax concept, not an economic concept. In other words, many fund sponsors try to maximize ROC when they could just as easily classify it as realized capital gains, but then that would be taxable. You really need to understand how these funds manage their option overlays. If a fund appreciated 10% for a year at NAV and paid out 9%, you would probably say the fund earned that 9% and thus, it was not ROC. Option-income funds can often classify most of that 9% as ROC because of the way they manage options with their portfolio.
    Nov 6, 2012. 07:06 AM | 1 Like Like |Link to Comment
  • If Bill Clinton Gave A Speech On Fiscal Responsibility In Equity CEFs [View article]
    Thanks. Trying to figure out the day to day moves of CEFs is an exercise in futility. It's NAV is up over 20% YTD and its discount was back over -10% the day before, so maybe that was the reason.
    Nov 2, 2012. 08:55 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    ROC tends to fly under the radar of the IRS so I wouldn't expect any changes. The fact that your cost basis is reduced by the ROC amount makes it a hard argument to make changes anyway. Now tax-free municipal bonds are another story and there has been a lot of talk in this regard since this is a MUCH larger revenue source for the Govt to go after than ROC. This is a big reason why I wrote this article because I believe ROC may become even MORE advantageous if any changes are made to the tax status of interest payments from muni bonds.
    Oct 31, 2012. 08:01 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    Hard to find the time. My articles here are really my newsletter right now! Thanks for note.
    Oct 31, 2012. 07:52 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    Thank you for your comments, here and previously...
    Oct 31, 2012. 07:51 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    The point of comparing high ROC option-income CEFs with leveraged municipal bond CEFs was to dispel the perception that the latter would hold up much better than the former during a bear market. Certainly, individual muni bonds and muni bond mutual funds & ETFs would, but not necessarily more risky muni bond CEFs.

    Then consider that most of the 12%-15% yields offered by option-income CEFs during this time period was "tax-free" ROC compared to say, 6%-7% yielding tax-free municipal bond CEFs and you can see that the tax-equivalent total returns were far better for the defensive option-income funds during this period.

    Thanks for correcting the total return performance of ETB rather than its parent company, EV.
    Oct 30, 2012. 12:20 PM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    I generally don't include MLPs and REITs in my analysis for the reasons you give. Tough enough trying to keep track of the ones I already follow!
    Oct 30, 2012. 11:21 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    There's not many option-income funds that have outperformed ETB either on a total return market price basis and especially on a total return NAV basis, particularly considering how defensive it is. However, for an up market, leveraged option-income funds like INB and DPO will outperform.
    Oct 30, 2012. 10:37 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    Thanks for your comment. You always keep me in check and I appreciate that. I suppose if everyone knew as much about ROC and CEFs as you and I did, then I wouldn't have to keep emphasizing the same points over and over again but I believe a lot of investors still don't understand the basics of CEFs, let alone more complex issues. How many investors do you think buy a CEF thinking that it's an ETF w/ the assumption that it has no other basis of valuation other than it's market price? For most individual investors and even brokers, I think the percentage is still pretty high.

    The only fund family that I know of that puts out their option overlay each month is for Nuveen's JSN, JLA, JPZ & JPG but that's because its the same % each month. They just adjust the in-the-money vs out-of-the-money based on where the market is each rotation.

    I own all the Eaton Vance CEFs, including their leveraged ones, except for ETJ. ETJ has no upside in an up market and its NAV total return is only 2% YTD. Surprisingly, EXG now has the best YTD NAV performance up about 11%, but as I've said in past articles, EXG is the most risky while ETJ has the least upside and downside. The question is can it continue to pay a 9.5% NAV yield w/ that limited up or downside? I'm not sure it can.
    Oct 30, 2012. 10:23 AM | Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Not an easy answer since a lot of it will have to do with the market environment. A strong ramp-up market favors the leveraged funds and my favorites w/ above average yields and strong NAV performance are CHW, UTF & EVT though they tend to be more volatile and its best to buy on weakness. A flat to even slightly down market favors the option-income funds and ETV, JLA & ETW have very generous yields and are very defensive. Other option-income funds with a bit more NAV umph for an up market and have above average yields include INB & EXG. Of these funds, only ETV and JLA are pure US stock based. The others are global (US and Intl) so it will also depend on how the US vs. the International markets perform.
    Oct 19, 2012. 09:10 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Thank you. Good to hear my articles are making a difference. Didn't always seem that way!
    Oct 19, 2012. 08:46 AM | 1 Like Like |Link to Comment
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