Joe Eqcome

CEF Weekly Review: Wall of Worry

You are correct. HTR's distribution has been a constant .0475 monthly distribution per shares.

I apologize for the error. Thanks for the heads up.

Joe Eqcome


On Oct 05 10:27 AM User 153012 wrote:

> Re your htr comment: distribution has been constant @ .0475.

CEF Weekly Review: Wall of Worry

Candidly, I think that if that’s your logic regarding the justification of a managed distribution policy, the fund should be completely liquidated so investors get all their capital back immediately as opposed to dribbling it out in a return of capital portion of its distribution.

A 15% discount is a compelling for liquidation--particularly if its been persistent. This partial payout of capital is only for the benefit of the advisor who continues to generate fees. However, the fund’s shareholders suffer as the fund gets smaller the expense ratio become larger, the liquidity becomes less and valuation will continue to deteriorate.

If the trustees had the shareholders best interest at heart they should liquidate the fund. But, as we all know, the trustee are usually beholding to the CEF sponsors.

Joe Eqcome


On Oct 05 10:00 AM User 153012 wrote:

> Re your csp "eating your young" comment on managed distribution:
> would you rather have principal payments immediatly marked down 15%
> on receipt by the fund, or have that payment in your hands, at 100%,
> to invest where you please? The new policy was adopted at the urging
> of the fund's largest shareholder.

CEF Weekly Review: Wall of Worry

I agree with your assertions--particularly, regarding the complexity with respect to this Buy/Write sector.

I believe the option premium is only recognized for GAAP purposes on expiration as opposed to being amortized over the life of the option contract. So, were probably not getting an accurate read of net investment income portion of the distribution on an interim basis.

So, you'd have to interpolate the net investment income to address your issue of matching investment earnings with the interim distributions. This would be difficult.

Other alternative would be to look at undistributed net income number. If it’s a negative number then you’d be possibly closer to having a portion of the distribution being return of capital—albeit, no guarantee.

How much reliability would you place on the Section 19 reports for the character of the distribution?

Any help here would be appreciated. It is a complicated area as you suggest.

And as a result it may be inefficient.

Joe Eqcome


On Oct 05 04:37 AM GlobalTrekker wrote:

> For the ETW distribution yield, I think it would be most useful to
> track the actual income of the fund. That, combined with its annual
> return, would give the best idea of true yield. For the buy/writes,
> even the return of capital is a confusing measure.