Joe Eqcome

Large Cap CEFs Underperform Large Cap ETF, Offer Other Advantages

Alan Young

Your points are thoughtful. The chart accompanying the article was based on monthly share price change and not total return.

To your point, I do have a chart comparing the annual total returns of large cap CEFs with the S&P 500. It shows the same pattern although a much less pronounced. Indexed at year-end 2001, CEFs underperformed the S&P 500 by 19% by the end of 2008 on a total return basis.

I also agree that total return is the right metric for evaluating long term investments. Since my observation regarding both BLU and ZF were for short-term trading purposes (3 to 6 months) the distribution was less important.

Joe Eqcome



On Apr 09 10:00 AM Alan Young wrote:

> Is your chart a price chart or a TOTAL RETURN chart? Those 12% annual
> distributions would make a huge difference!
> So, please be clear.
> The discount can be helpful at times but is incidental to your point
> about performance. Total return is the key.
>

CEFs Continued to Outpace the Market in January

Mavericks,

You're right about the greater number of CEFs in those groups being at premiums. Of the 201 CEFs in those categories, 25 were at premiums at the end of 2008 vs only 9 at the end of 2007.

Of the four categories, the average discount for Loan Funds declined (5.1% vs 9.9%) while the average discount widened for the other categories.

Of the Loan Funds EFT, JFR and PFL went from discounts at the end of '07 to slight premiums at the end of '08. Don't know if that qualifies them as sells?

Joe Eqcome


On Feb 03 11:25 PM mavericks wrote:

> CEF's have been on a ROLL!! If they are the canary in a coal mine,
> the market is due to take off. If not, CEF's are in bubble mode.
> I've NEVER seen so many CEF's at premiums, particularily high yield,
> preferred stock, loan participation and munis.