Sat, Apr. 9, 8:51 AM
- In a world of barely visible interest rates, it pays to borrow, rather than invest, Bill Gross tells Barron's. One way to do that is to speculate in merger-arbitrage plays where the acquiring company does the borrowing for you - think Berkshire Hathaway's purchase of Precision Castparts last year or the current AB InBev bid for SABMiller, both of which Gross' Janus Unconstrained Bond Fund (MUTF:JUCAX) were/are in.
- Another way are closed-end funds which borrow and lever assets 35-50%, and his fund has 8-9% of its money in CEFs trading at a discount to NAV. Two favorites are the Nuveen Preferred Income Opportunities fund (NYSE:JPC) and the Duff & Phelps Global Utility Income fund (NYSE:DPG).
- Another example of letting others do the borrowing for you are mortgage REITs like Annaly Capital (NYSE:NLY) and American Capital Agency (NASDAQ:AGNC). Annaly is levered 4-6 times vs. banks at 8-9 times. It borrows in the overnight repo market and invests in government-backed mortgages, resulting in a yield of about 11% thanks to leverage, not risky assets.
Tue, Mar. 15, 4:48 PM
Under normal market conditions, the Fund will invest at least 80% of its total assets in dividend-paying equity securities of companies in the utility industry. The utility industry is defined in this Prospectus to include the following sectors: electric,
Industry: Closed-End Fund - Equity
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