The Rodney Dangerfield Of Closed-End Funds [View article]
Scooter-Pop: HTD is a good CEF to keep on a watchlist. Right now it is selling at about an average discount, but the overall market seems a bit overbought. A better time to buy HTD may be coming when the stock market has its next "swoon".
The Rodney Dangerfield Of Closed-End Funds [View article]
stu_s:
There were capital losses in 2007 and 2008. HTD generates both income and capital gains or losses every year. Since 2009, they have generated capital gains, but still have not used up the tax losses available from 2007/2008. HTD is a tax advantaged fund and they try to minimize the tax bite.
The Right Way To Exercise Your Oxford Lane Rights [View article]
I took a look at OXLC, but am turned off by the super high expenses for borrowing costs and management fees. The fund has high leverage cost- they sold a 8.5% preferred stock. This is taken from the prospectus and speaks for itself:
FEES AND EXPENSES Stockholder transaction expenses: Sales load (as a percentage of offering price) 4.00 %(1) Offering expenses borne by us (as a percentage of offering price) 0.97 %(2) Dividend reinvestment plan expenses None (3) Total stockholder transaction expenses (as a percentage of offering price) 4.97 %
Annual expenses (as a percentage of net assets attributable to common stock):
Base management fee 2.95 %(4) Incentive fees payable under our investment advisory agreement 1.38 %(5) Interest payments on borrowed funds — %(6) Preferred Stock Dividend Payment 4.02 %(7) Other expenses (estimated) 1.74 %(8) Acquired fund fees and expenses (estimated) 2.94 %(9) Total annual expenses (estimated) 13.03 %
The Right Way To Exercise Your Oxford Lane Rights [View article]
The rights offering fee is waived at some brokers if you maintain enough assets with them or trade frequently.
For example at Fidelity, it is waived if: 1) your household has above $1 million in assets OR 2) Your household has above $25,000 in assets + 120 trades a year.
I Got 99 Problems But A Proration Ain't One, Part II: IFN [View article]
Chris- I'm not sure if having two accounts would always work unless the accounts have different social security numbers. In most of these odd lot tender offers, you are not supposed to have more than 99 shares in total in all accounts owned by the beneficial owner. Of course, this may not be strictly enforced in practice.
The Rodney Dangerfield Of Closed-End Funds [View article]
Thomas-
Good question! For this report, I used the standard sharpe ratio calculation available in a CEF screener at Fidelity. They use the risk free rate as the benchmark.
But by comparing the two Sharpe ratios (HTD vs. SPY) you get an idea how HTD did against the S&P.
The Rodney Dangerfield Of Closed-End Funds [View article]
Thanks, Scooter. The market seems a little overbought now after the 5% pop in January, but HTD has a fairly low beta and should hold up pretty well if there is a further correction.
The Rodney Dangerfield Of Closed-End Funds [View article]
I agree with Doug that HTD has clearly outperformed on a total return basis. Another CEF that scored very high based on the Sharpe ratio the last three years is GRX which Doug has written about. That is more of a sector fund specializing in health care.
4 Attractive Senior Loan Closed-End Funds For 2012 [View article]
pcettier-
Fitzgerald was referring to Libor floaters with a floor. Most recently issued floaters have a floor, although some of the older floating rate loans do not. The 125 basis point or higher average is likely a rough estimate that would vary from fund to fund depending on how many floaters they own with a floor, and the details of where the floor is set.
One reason the senior loan CEFs have been able to raise their distributions over the last year is that their income goes up as older floating rate senior loans (without a floor) mature and are replaced with new issues with a floor.
A Little Known Way To Buy Nestle, Roche And Novartis For 85 Cents On The Dollar [View article]
Jagarde- I don't expect much activism here, but there was a partial voluntary tender offer last year. It is also quite possible the discount can narrow below 10% through normal trading.
Should I Convert My Dividend Growth IRA To A Roth IRA? [View article]
Your heirs can benefit greatly when money is in a Roth IRA. The beneficiary needs to make RMD's but based on their own life expectancy.
Suppose a one year old grand child (or even a great grand child) inherits your Roth IRA. The RMD for a one year old will stay low for many years. Your Roth IRA can compound for many years and all of the payouts are also tax free. An IRA of $250,000 might easily pay out millions of tax free dollars over the lifetime of your grandchild.
Asset Location Strategies for Municipal Bond Funds [View article]
Qniform- Thanks, I'm glad you found it helpful.
It will be interesting to see what happens next year with our tax system. Mitt Romney mentioned a proposal where dividend and capital gains rates would be zero for those making under $200,000 ayear. If that occurs, muni bonds will take a big hit since they will lose any relative advantage for 98% of the population.
The Rodney Dangerfield Of Closed-End Funds [View article]
HTD is a good CEF to keep on a watchlist. Right now it is selling at about an average discount, but the overall market seems a bit overbought. A better time to buy HTD may be coming when the stock market has its next "swoon".
The Rodney Dangerfield Of Closed-End Funds [View article]
There were capital losses in 2007 and 2008. HTD generates both income and capital gains or losses every year. Since 2009, they have generated capital gains, but still have not used up the tax losses available from 2007/2008.
HTD is a tax advantaged fund and they try to minimize the tax bite.
The Right Way To Exercise Your Oxford Lane Rights [View article]
FEES AND EXPENSES
Stockholder transaction expenses:
Sales load (as a percentage of offering price) 4.00 %(1)
Offering expenses borne by us (as a percentage of offering price) 0.97 %(2)
Dividend reinvestment plan expenses None (3)
Total stockholder transaction expenses (as a percentage of offering price) 4.97 %
Annual expenses (as a percentage of net assets attributable to common stock):
Base management fee 2.95 %(4)
Incentive fees payable under our investment advisory agreement 1.38 %(5)
Interest payments on borrowed funds — %(6)
Preferred Stock Dividend Payment 4.02 %(7)
Other expenses (estimated) 1.74 %(8)
Acquired fund fees and expenses (estimated) 2.94 %(9)
Total annual expenses (estimated) 13.03 %
The Right Way To Exercise Your Oxford Lane Rights [View article]
For example at Fidelity, it is waived if:
1) your household has above $1 million in assets
OR
2) Your household has above $25,000 in assets + 120 trades a year.
The Rodney Dangerfield Of Closed-End Funds [View article]
Congratulations. It sounds like you have a found a low maintenance approach that works well for you. HTD should fit in well with this approach.
In some of my other articles I discuss CEFs that may be undervalued but require opportunistic monitoring to sell at the right time.
I Got 99 Problems But A Proration Ain't One, Part II: IFN [View article]
I'm not sure if having two accounts would always work unless the accounts have different social security numbers. In most of these odd lot tender offers, you are not supposed to have more than 99 shares in total in all accounts owned by the beneficial owner. Of course, this may not be strictly enforced in practice.
The Rodney Dangerfield Of Closed-End Funds [View article]
Good question! For this report, I used the standard sharpe ratio calculation available in a CEF screener at Fidelity. They use the risk free rate as the benchmark.
But by comparing the two Sharpe ratios (HTD vs. SPY) you get an idea how HTD did against the S&P.
The Rodney Dangerfield Of Closed-End Funds [View article]
The Rodney Dangerfield Of Closed-End Funds [View article]
4 Attractive Senior Loan Closed-End Funds For 2012 [View article]
Fitzgerald was referring to Libor floaters with a floor. Most recently issued floaters have a floor, although some of the older floating rate loans do not. The 125 basis point or higher average is likely a rough estimate that would vary from fund to fund depending on how many floaters they own with a floor, and the details of where the floor is set.
One reason the senior loan CEFs have been able to raise their distributions over the last year is that their income goes up as older floating rate senior loans (without a floor) mature and are replaced with new issues with a floor.
A Little Known Way To Buy Nestle, Roche And Novartis For 85 Cents On The Dollar [View article]
Advantages of EWL- lower expenses and better liquidity
Advantage of SWZ- available at 15% discount to NAV
Right now, I like SWZ a little better because of the 15% discount. If the discount fell below 10%, I would prefer EWL.
A Little Known Way To Buy Nestle, Roche And Novartis For 85 Cents On The Dollar [View article]
I don't expect much activism here, but there was a partial voluntary tender offer last year. It is also quite possible the discount can narrow below 10% through normal trading.
Should I Convert My Dividend Growth IRA To A Roth IRA? [View article]
Suppose a one year old grand child (or even a great grand child) inherits your Roth IRA. The RMD for a one year old will stay low for many years. Your Roth IRA can compound for many years and all of the payouts are also tax free. An IRA of $250,000 might easily pay out millions of tax free dollars over the lifetime of your grandchild.
Putnam Premier Income: Good Opportunity To Reload [View article]
You got a good price on PPT. The NAV was up a penny today, but the market price was unchanged, so the discount widened a bit.
Asset Location Strategies for Municipal Bond Funds [View article]
It will be interesting to see what happens next year with our tax system. Mitt Romney mentioned a proposal where dividend and capital gains rates would be zero for those making under $200,000 ayear. If that occurs, muni bonds will take a big hit since they will lose any relative advantage for 98% of the population.