Equity CEFs: Is It Time To Overweight The Option Income Funds? [View article]
I'm sure Morningstar includes distributions but then you would have been better off in SPY than the vast majority of securities over the past 1 week to 5 years anyway! So much of the QE funds simply gets thrown into the broad based ETFs by the banks and brokerages that it has been hard for anyone to beat the S&P 500 quite frankly.
But I'm trying to project into the future and if the markets turn more flat to defensive, then the option-income funds should start to make up ground, at least at the NAV level.
The S&P 500 Did Not Hit Record Level In 2013, It Made It In 2012 [View article]
Absolutely correct. I've been pointing this out that SPY (most popular S&P 500 ETF) has been hitting all time highs for some time now when you add back dividends. All you need to do is graph the S&P 500 with SPY and realize they are mirror images of each other. Then consider that SPY has dividends (each reducing the market price by the dividend) while the S&P 500 index does not. The end result is that SPY has far "outperformed" the S&P 500 and was hitting all time highs back in 2012.
Depends on your position holding. If an equal weight with other positions, its a hold. If its an overweight, like say 15% or more, then might want to cut back to an equal weight of 5% to 10%.
In the short time I've owned it, it hasn't traded well despite its undervaluation. But that could change very quickly and I've seen that happen before. Its actually performed better at market than NFJ & NAI longer term but it really deserves a higher valuation considering its NAV outperformance. I'll re-visit ahead of next declaration when Allianz could, once again, raise.
Equity CEFs: Income Strategies For All Market Seasons (Updated) [View article]
Yes, that would be a good start. Or you can wait until I come out with my recommendations. Certainly, funds which have had good NAV growth, are at a solid discount and haven't seen their market prices get ahead of themselves is a good place to start. An NAV yield in that 7%-9% sweet spot is also a good range though I wouldn't eliminate funds which have a lower NAV yield or you might miss a fund like GRX.
One set of data that is not shown is the longer 3-year and 5-year NAV performance results. I actually prefer using from the market low in March '09 instead of a 3-year period and using from the market high in October '07 instead of a 5-year. That way, you see how the funds have performed at the NAV level in different market environments. From that as well as the other data, I rank each fund according to its attractiveness, however, I don't share that information here. I do have to keep some information proprietary for myself and my clients.
I would also suggest reading this article I wrote on February 4th which describes how I narrowed a list down, http://bit.ly/YZwvNS.
Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
James, that's a much better explanation and yes, I agree that many investors don't know what they are getting and buy these funds blindly without doing the research to know which funds are able to support their distributions.
That's a big reason why I like these funds...your competition is not institutional investors who have infinite resources when it comes to researching and picking individual stocks. However on CEFs, your competition is mostly small individual investors who won't even bother to look at a fund's NAV, let alone how it has performed.
Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
James, with all due respect, I have been following and investing in these funds for years, so I think I know how they work. Frankly, their true yield is actually much less than even you think. Try more like only 2%, which barely covers their expenses.
However, if you've ever sold a covered-call option then you know you could realize up to another 18% annual return in option premium IF those options expired worthless and you were able to keep that option premium. Not likely, but even if you were only able to keep half that premium (more typical), there's your 9%.
Now imagine in an up market like we've been in, your losing in your short options, so you're paying your distribution out of unrealized portfolio gains. All ROC. In a flat or down market, you're keeping that option premium but you can offset against losses you've generated in options and stock. Mostly ROC.
This is how these funds work, in a nutshell. They will typically lag (at NAV) in a strong up market like this but they will outperform in a flat to down market. A 7%-9% NAV yield is perfectly achievable with these funds and most of that is ROC.
Muni Bond CEFs Take A Beating Again [View article]
I think weeks like this are driven more by institutional asset managers and market makers in these securities. When you see across the board all fixed income CEFs down and all at similar percentage losses, not just muni bond CEFs, that means institutional selling. Individual investors have no control and are just along for the ride. Could it be an asset allocation change to equities? Sure, but more importantly, this was a decision to lessen exposure to fixed-income CEFs and I doubt they will be back soon.
Muni Bond CEFs Take A Beating Again [View article]
Like I said...I don't really cover fixed-income bond CEFs so its hard for me to pass judgement on DMF or any other bond fund. I will say that these muni bond funds tend to all move in the same direction so I'm not even sure it would make that much of a difference which fund you bought.
ETV, unfortunately is stuck with March option expirations that are already well in the money so it will have very little NAV upside until Eaton Vance closes the options and restablishes at higher strike prices farther out.
ETY should be fine since their option coverage is just half that of ETV so they'll capture more upside but in this kind of market, leveraged equity funds are the place to be. That's why Eaton Vance's leveraged CEF's, ETO, EVT and ETG are far outperforming right now and have cut their discounts substantially. ETG is about at a premium and I'm getting close to shorting it as a hedge since I own ETO and EVT.
Get back to me after you've compared the short and long term NAV total return performances of NIE compared to NFJ, NAI & NGZ. All of these funds started with $23.83 NAVs at inception. And which fund still has an NAV over $20? Only NIE. In fact, you'll find that NIE is the only AllianzGI equity fund that has performed even close to the S&P 500. NAI, as an international fund, has been a disaster and AllianzGI should have cut the distribution well before I called for it last July. NGZ has been fine and I own it although NFJ has been a severe under performer ever since it raised its distribution. It's the only reason I hesitate to strongly endorse a raise for NIE even though it is the only AllianzGI fund that deserves it at an absurdly low 5.5% NAV yield.
Not always. 2-years ago, NIE was more like a mid single digit discount, even below -4% on 4/6/11. The fact is, NIE's total return NAV (including distr) has been much better than Allianz's other equity CEFs...NFJ's, NAI's, & NGZ's over just about any time frame. I like to use from the market high back around 3rd qtr. '07, market low around 1st qtr. '09 and a shorter 1-year or so time frame. Considering where NIE's NAV is now, well over $20, and Allianz could easily raise. We'll find out soon.
2 Low-Cost, High-Yielding CEFs For Investors On A Budget [View article]
The "flash crash" mid November swoon by CEFs, bond & equity, was probably NOT triggered by the elections. Although nobody knows precisely was caused it, the thinking is that a large holder or market maker in these securities took off their leveraged carry trade.
Equity CEFs: Is It Time To Overweight The Option Income Funds? [View article]
But I'm trying to project into the future and if the markets turn more flat to defensive, then the option-income funds should start to make up ground, at least at the NAV level.
The S&P 500 Did Not Hit Record Level In 2013, It Made It In 2012 [View article]
Wow...Consider Selling IGA & IID Ahead Of Ex-Dividend Date [View instapost]
What Is It With NIE? [View instapost]
In the short time I've owned it, it hasn't traded well despite its undervaluation. But that could change very quickly and I've seen that happen before. Its actually performed better at market than NFJ & NAI longer term but it really deserves a higher valuation considering its NAV outperformance. I'll re-visit ahead of next declaration when Allianz could, once again, raise.
Equity CEFs: Income Strategies For All Market Seasons (Updated) [View article]
One set of data that is not shown is the longer 3-year and 5-year NAV performance results. I actually prefer using from the market low in March '09 instead of a 3-year period and using from the market high in October '07 instead of a 5-year. That way, you see how the funds have performed at the NAV level in different market environments. From that as well as the other data, I rank each fund according to its attractiveness, however, I don't share that information here. I do have to keep some information proprietary for myself and my clients.
I would also suggest reading this article I wrote on February 4th which describes how I narrowed a list down, http://bit.ly/YZwvNS.
Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
That's a big reason why I like these funds...your competition is not institutional investors who have infinite resources when it comes to researching and picking individual stocks. However on CEFs, your competition is mostly small individual investors who won't even bother to look at a fund's NAV, let alone how it has performed.
Equity CEFs: 9% Tax-Exempt Yields Being Given Away - The Greatest Story Not Being Told [View article]
However, if you've ever sold a covered-call option then you know you could realize up to another 18% annual return in option premium IF those options expired worthless and you were able to keep that option premium. Not likely, but even if you were only able to keep half that premium (more typical), there's your 9%.
Now imagine in an up market like we've been in, your losing in your short options, so you're paying your distribution out of unrealized portfolio gains. All ROC. In a flat or down market, you're keeping that option premium but you can offset against losses you've generated in options and stock. Mostly ROC.
This is how these funds work, in a nutshell. They will typically lag (at NAV) in a strong up market like this but they will outperform in a flat to down market. A 7%-9% NAV yield is perfectly achievable with these funds and most of that is ROC.
Muni Bond CEFs Take A Beating Again [View article]
Muni Bond CEFs Take A Beating Again [View article]
Muni Bond CEFs Take A Beating Again [View article]
Muni Bond CEFs Take A Beating Again [View article]
Will NIE Raise Its Distribution? [View instapost]
ETY should be fine since their option coverage is just half that of ETV so they'll capture more upside but in this kind of market, leveraged equity funds are the place to be. That's why Eaton Vance's leveraged CEF's, ETO, EVT and ETG are far outperforming right now and have cut their discounts substantially. ETG is about at a premium and I'm getting close to shorting it as a hedge since I own ETO and EVT.
Will NIE Raise Its Distribution? [View instapost]
Will NIE Raise Its Distribution? [View instapost]
2 Low-Cost, High-Yielding CEFs For Investors On A Budget [View article]