Seeking Alpha

Babson Capital Corporate Investors (MCI)

  • Oct. 10, 2012, 12:41 PM
    Not limited to mortgage REITs, panic grips another favorite of income investors, closed-end investment funds - notably those trading far above NAV for seemingly no other reason than their fat yield. The payouts on many of these are sustained by digging into capital rather than by earning a return on it. PGP -7.5%, PHK -7.8%, PHT -5.5%.
  • Oct. 8, 2012, 3:25 PM
    Blinded by fat yields, investors continue to bid closed-end funds far higher than their NAVs. 66% of taxable and 73% of muni-bond funds trade above NAV now, compared to just 30% a year ago, with often the funds with the highest distributions having the highest premiums. "We believe that an excessive premium for the fund is not likely to be sustainable," says Gabelli of one of its funds. Are investors listening?
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Company Description
To maintain a portfolio of securities providing a fixed yield and offering an opportunity for capital gains. The principal investments are privately placed, below-investment grade, long-term corporate debt obligations with equity features such as warrants,