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Douglas Albo
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Registered Investment Advisor. Prior experience includes 12-years as a Vice-President, Financial Advisor at Smith Barney and Morgan Stanley.
My company:
Capital Income Management, LLC
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  • Will NIE Raise Its Distribution? 10 comments
    Mar 7, 2013 2:51 PM

    Never seen a CEF with well over a $20 NAV have so much trouble busting through $18! Can still buy here in the $17's at a -12%+ discount and a very good chance of a distribution increase when declared tomorrow (Friday, March 8) or early next week. NIE's NAV has far outperformed any of the other Allianz/PIMCO equity based CEFs so it is certainly deserving with an exceptionally low 5.5% NAV yield. Even if AllianzGI doesn't raise, the fund should be trading at $18.50 to $19, still well under its $20.42 NAV as of March 6th close.

    Disclosure: I am long NIE.

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Comments (10)
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  • Jerbear
    , contributor
    Comments (901) | Send Message
     
    Thanks Doug,
    Been waiting for you to comment on some of your recommendations.

     

    I have some money to invest and will put it in NIE. Thanks for helping us little guys out.
    7 Mar 2013, 08:02 PM Reply Like
  • jfada
    , contributor
    Comments (37) | Send Message
     
    It has always sold at a big discount; what do you believe would trigger a change?
    7 Mar 2013, 09:54 PM Reply Like
  • Douglas Albo
    , contributor
    Comments (703) | Send Message
     
    Author’s reply » Not always. 2-years ago, NIE was more like a mid single digit discount, even below -4% on 4/6/11. The fact is, NIE's total return NAV (including distr) has been much better than Allianz's other equity CEFs...NFJ's, NAI's, & NGZ's over just about any time frame. I like to use from the market high back around 3rd qtr. '07, market low around 1st qtr. '09 and a shorter 1-year or so time frame. Considering where NIE's NAV is now, well over $20, and Allianz could easily raise. We'll find out soon.
    8 Mar 2013, 10:07 AM Reply Like
  • Left Banker
    , contributor
    Comments (2307) | Send Message
     
    At 6.2% or so yield and modest growth for some time now, it seems there are other, more attractive options. Why do you think the discount has not caught up?

     

    Look at NFJ, for example: Discount is "only" 6.5% but the distribution yield is over 10%. NAI has discount and yield similar to NFJ. And, NGZ: -10% an 8.4% yield and the chart doesn't lag NIE by a whole lot.

     

    Seems like the 12% discount is about right compared to its siblings.
    8 Mar 2013, 04:13 PM Reply Like
  • Douglas Albo
    , contributor
    Comments (703) | Send Message
     
    Author’s reply » Get back to me after you've compared the short and long term NAV total return performances of NIE compared to NFJ, NAI & NGZ. All of these funds started with $23.83 NAVs at inception. And which fund still has an NAV over $20? Only NIE. In fact, you'll find that NIE is the only AllianzGI equity fund that has performed even close to the S&P 500. NAI, as an international fund, has been a disaster and AllianzGI should have cut the distribution well before I called for it last July. NGZ has been fine and I own it although NFJ has been a severe under performer ever since it raised its distribution. It's the only reason I hesitate to strongly endorse a raise for NIE even though it is the only AllianzGI fund that deserves it at an absurdly low 5.5% NAV yield.
    9 Mar 2013, 02:11 PM Reply Like
  • Dancing Scorpion
    , contributor
    Comments (40) | Send Message
     
    You seem to have writer's block lately or perhaps you've just kept busy shooting quail and fishing.

     

    Whatever, what's in store for ETY and ETV as the equity market moves steadily higher?

     

    Millions of people want to know...
    8 Mar 2013, 07:48 PM Reply Like
  • Douglas Albo
    , contributor
    Comments (703) | Send Message
     
    Author’s reply » ETV, unfortunately is stuck with March option expirations that are already well in the money so it will have very little NAV upside until Eaton Vance closes the options and restablishes at higher strike prices farther out.

     

    ETY should be fine since their option coverage is just half that of ETV so they'll capture more upside but in this kind of market, leveraged equity funds are the place to be. That's why Eaton Vance's leveraged CEF's, ETO, EVT and ETG are far outperforming right now and have cut their discounts substantially. ETG is about at a premium and I'm getting close to shorting it as a hedge since I own ETO and EVT.
    9 Mar 2013, 02:20 PM Reply Like
  • Dancing Scorpion
    , contributor
    Comments (40) | Send Message
     
    Many thanks for the reply. You're the best!
    10 Mar 2013, 08:14 AM Reply Like
  • Dancing Scorpion
    , contributor
    Comments (40) | Send Message
     
    What effect is the buyback at ETY and ETV having? To what extent if any has it contributed to increasing the market price of these funds? Or contributed to a more beneficial NAV?

     

    Finally, what do you "sense," "guess," is the upward limit of prices for both these funds if the DOW continues rising toward 15-16,000?
    11 Mar 2013, 05:29 AM Reply Like
  • ajs122@yahoo.com
    , contributor
    Comments (2) | Send Message
     
    Doug, thank you for sharing your work. I find myself always looking forward to reading and learning from you. DPO looks very interesting and seems to be a good discount and an attractive yield. when I look at the portfolio I see that have swap contracts. is this a hidden liability that can create problems during another downturn?

     

    TIA

     

    ajs
    5 May 2013, 08:53 PM Reply Like
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