Joe Eqcome

Attractive and Secure Monthly CEF Distributions?

Global Trekker

Thank you for your comments. Let me deal with your comments in the order is which you presented them.

With regards to the screening approach, why don’t you sketch out your recommended research design in greater detail? I’m not sure what your null hypothesis is? Or what you’re trying to demonstrate or prove. Further elaboration would be helpful.

Would you provide further evidence on the underperformance of DHF and FAM? What time period are you utilizing? What the underperformance amount is?

As it relates to the stocks mentioned in the article, I made it a point to highlight the fact that a full portfolio analysis has not been undertaken. You may in fact be correct on regarding the quality some of these portfolios. However, we all would prefer more facts regarding your contention.

With regards to FAM and DHF you have confused the expense ratio with the management fees. The net management fees are 1.83% which exclude interest expense and fees.

We all look forward to your further clarification and substantiation of your comments.

Joe Eqcome



On Aug 26 04:11 PM GlobalTrekker wrote:

> User 445849,
>
> Where did you hear about the div cut? Even their public desk was
> unaware. The delayed dividend announcement was a tip off. Quite a
> big drop: 12% cut.
>
> Joe Eqcome,
>
> Like your posts and analysis, but I think there is a limit to this
> type of screening analysis. A much more valid approach would be back-testing
> these hypotheses on random time intervals and seeing if the short-term
> return was greater than the S&P or appropriate bond index over
> that interval. I really have doubts about most of these picks. DHF
> and FAM both look like a bunch of crap that have underperformed compared
> to their indices. It's just their discounts have fallen. DHF with
> a 3.1% management fee is appalling compared to JNK's 50 b.p.s fee.
> And FAM is a disaster waiting to happen at 29% leverage and a completely
> unjustifiable 3.6% management fee.

Attractive and Secure Monthly CEF Distributions?

Alan Young

I use two sources for sourcing dividends supported by net investment income.

The first is CEFA: www.cefa.com/FundSelec... They have a tab for "Distributions" which has the most recent distributions broken out by income and capital gains. The only problem with this source is it’s usually stale and it rounds up the monthly distributions to the penny.

I check this against the distribution history at ETFconnect.com for the particular CEF. This source is usually updated more quickly and extends the monthly distribution to four digits.

While neither of these sources is infallible, it is the best way to capture the data quickly.

The other alternative is to go to each individual CEF's Section 19 notice. However, the official final determination is usually made after the end of the year in a "Form 1099 Div" mailed to shareholders.

Joe Eqcome


On Aug 26 10:44 AM Alan Young wrote:

> Great article. Thank you Joe, your criteria are exactly what I look
> for in CEF investing, and FAM has been my favorite for over a year.
>
>
> Can you explain how you find whether the monthly distribution is
> covered by NII? This has been the most bothersome element in my CEF
> research, since most sponsors don't post it directly.