Seeking Alpha

John Cole Scott

 
View as an RSS Feed
View John Cole Scott's Comments BY TICKER:
Latest comments  |  Highest rated
  • BDC CEFs Poised To Perform Well In A Rising Rate Environment: Potential For Growing Income & Positive Total Return [View article]
    RICs encompass unit investment trusts (UITs), Open-end funds, traditional closed-end funds, business development company CEFs and exchange-traded funds.

    http://1.usa.gov/A8W9XO

    FGB is a Trad CEF that owns Mostly BDC CEFs, just like FOF is a Trad CEF that mostly owns Trad CEFs.

    We believe most people think of BDC CEFs as operating companies and wanted to make their structure easier to see their connection to their close-end fund cousins. There are also private closed-ended management companies, but as we focus on 40 Act, actively managed funds that trade publicly, do not cover them.
    Jul 13, 2014. 08:18 PM | Likes Like |Link to Comment
  • BDC CEFs Poised To Perform Well In A Rising Rate Environment: Potential For Growing Income & Positive Total Return [View article]
    Berloe, BDC CEFs are closed-ended Managment Companies that operate under 40 Act and the 33/34 Act.

    From the Article. "BDC CEFs are not new investment structures. They are regulated investment companies, created by Congress in 1980 to help spur investment in smaller companies and give investors access to strategies previous only available to accredited or high net worth investors. BDC CEFs generally make loans and or invest in smaller US companies and pass on the interest to shareholders as income in a similar fashion to REITs and MLPs.

    BDC CEFs are "flow through" vehicles for tax purposes and pay no corporate taxes as long as they distribute 90% of their annual income to shareholders. We follow them alongside our work in traditional CEFs as *** they meet our firm's CEF definition: active portfolio management, fixed capital structure and investor liquidity through listing on exchanges. *** As the lending market from traditional banks has waned, BDC CEFs have increased lending to both growing and distressed companies. This can be a very profitable business when done well on a consistent basis. We started actively tracking BDC CEFs in our weekly CEF Universe data in March of 2014 and currently record 45 data points per fund.
    Jul 8, 2014. 11:24 PM | Likes Like |Link to Comment
  • How To Manage A Closed-End Fund Portfolio Like An Expert, Beyond The 'CEF Trifecta' [View article]
    Stevlg,

    I think to buy a ETN you need to know how it is different than a ETF, I am in no way an expert on ETFs and my client base is too conservative to be comfortable owning a 2X leveraged CEF product.

    I am a fan of many ways to get exposure to CEFs, competition and options are the basis of The US capital markets. There have been some thoughtful articles on SA covering CEFL as well as a thread on the Morningstar CEF Discussion Forum: http://bit.ly/1jwmpMC.
    Jun 17, 2014. 12:15 PM | Likes Like |Link to Comment
  • How To Manage A Closed-End Fund Portfolio Like An Expert, Beyond The 'CEF Trifecta' [View article]
    Keelac, Fairly safe is a relative term. We don't comment on individual securities very often for compliance and business reasons. However, I would look a CEF and decide: 1. Do you want exposure to the sector / manager? 2. How is it performing (NAV) 3. What am I paying for the CEF, normal, too much or a good deal. If you want a fund, buying it after a dividend cut ( as longs as there are not more soon after) can be a very attractive entry point for investors.
    Jun 17, 2014. 12:08 PM | Likes Like |Link to Comment
  • The Closed-End Fund Trifecta: How To Analyze A CEF [View article]
    Brycenesbitt,

    Going to that link loads my preferences at CEF Connect vs. what you were trying to show me. If the market price of a CEF is above NAV then it is an absolute premium and if the market price is below NAV it is an absolute discount.
    Jun 4, 2014. 09:26 AM | Likes Like |Link to Comment
  • The Best-Performing Utility CEFs Over The Last 12 Months. [View article]
    Robert, Thank you for the kind words. We are very pleased there are more people adding to the closed-end fund conversation on SA.

    Best, JCS
    May 21, 2014. 11:43 AM | Likes Like |Link to Comment
  • Closed-End Fund Discounts: A Master-Class In Nuance [View article]
    Mercy, Thank you for the feedback. Warm regards, JCS
    May 20, 2014. 02:26 PM | Likes Like |Link to Comment
  • First Quarter 2014 CEF Review And Outlook: Discounts, Yield, IPOs And Activist Activity [View article]
    Robin,

    Thank you, feedback has been very positive. I plan to use a similar format each quarter as part of our coverage of the structure.
    Apr 16, 2014. 11:52 PM | Likes Like |Link to Comment
  • First Quarter 2014 CEF Review And Outlook: Discounts, Yield, IPOs And Activist Activity [View article]
    Hasu,

    BDC CEFs are not in CEF Connect [Yet]. Some good news though, we confirmed today that The CEF Association has added BDC CEFs to their constituents and I hear M* is added them to the CEF part of their website. I will be at Capital Link's CEF/ETF conference next week and will see if I hear more from M*/Thomson.

    I know of no public listings, we have access to various analyst coverage and my data team tracked down the SEC filings and fund sponsor websites. Here is the current list of BDC CEFs. They file like operating companies but are structured and regulated as closed-end funds.

    ARCC, ACAS, PSEC, AINV, MAIN, FSC, SLRC, HTGC, GBDC, PNNT, TCAP, NMFC, BKCC, TCPC, TCRD, MCC, TICC, CSWC, TAXI, MCGC, MVC, FDUS, KCAP, CPTA, GSVC, GARS, WHF, SVVC, SUNS, GAIN, PFLT, GLAD, SCM, NGPC, HRZN, OFS, MRCC, TINY, HCAP, FSFR, SAR, FULL, KIPO, TPVG, CMFN, ACSF, RAND.
    Apr 16, 2014. 11:50 PM | Likes Like |Link to Comment
  • First Quarter 2014 CEF Review And Outlook: Discounts, Yield, IPOs And Activist Activity [View article]
    Thanks Turk for the positive feedback. Picking actual funds requires knowledge of an investors risk tolerance, timeline and investment objective. It is also how we make our living.

    We sell access to CEF News Alerts, Our CEFU Data, a Monthly Best Ideas List, consulting and managed accounts in one of our 8 portfolio models. If you have any interest, sign-up on our website for The Scott Letter to learn more about the firm and services.
    Apr 16, 2014. 09:27 AM | Likes Like |Link to Comment
  • What Does A Closed-End Fund's Leverage Actually Cost? Achilles' Heel Or An Investor's Salvation? [View article]
    Have not forgot about this question. Hope to have it next week ... we were backlogged with quarter-end and quarter beginning workflow.
    Apr 15, 2014. 12:10 PM | Likes Like |Link to Comment
  • What Does A Closed-End Fund's Leverage Actually Cost? Achilles' Heel Or An Investor's Salvation? [View article]
    W.Kirk, very good point. We plan to add that data to our system as well. My initial question was what is a normal amount of cost. Getting more detailed on the specifics will help us make better choices when we do see rates rise.
    Mar 26, 2014. 01:58 PM | Likes Like |Link to Comment
  • What Does A Closed-End Fund's Leverage Actually Cost? Achilles' Heel Or An Investor's Salvation? [View article]
    I will ask my data manage to see if he can consolidate the inferred leverage cost by fund sponsor. I think it should also be groups by Equity, Taxable bond and Muni bond as they have different leverage best practices. It will take a few days, but will post our findings here.
    Mar 26, 2014. 09:08 AM | Likes Like |Link to Comment
  • The Future Of Closed-End Funds: Yield May No Longer Be The Marketing Plan [View article]
    Janus had expressed some interest last year, we will see. Watch for N-2 SEC filings.
    Feb 17, 2014. 12:46 PM | Likes Like |Link to Comment
  • The Future Of Closed-End Funds: Yield May No Longer Be The Marketing Plan [View article]
    My opinion would be that ETFs are generally liquid (due to creation units and redemption) exposure vehicles. CEFs are far less liquid. The average CEF is $482M, and trade $1.25M a day in liquidity. 207 of the 594 (35%) trade under $500K a day in ave liquidity.

    They benefit from the fixed capital, often permanent leverage, about 80% of CEF leverage is structural or permanent. CEFs offer investors, mostly individual and smaller to mid-sized, patient investors, the opportunity to buy access to portfolio models that most $1B firms/funds would have no idea how to access. I believe that for 95% of ETFs/CEFs they do not compete as their structures offer different strength and weakness and they do not fill the same hole in a portfolio goal. Some people prefer ETFs, others CEFs.

    An article covered this concept last year, but I would argue it is not a fair apples to apples comparison. http://bit.ly/1chGXbz (Data from our 2/14/14 CEF Universe Data).
    Feb 17, 2014. 12:44 PM | Likes Like |Link to Comment
COMMENTS STATS
113 Comments
19 Likes