Madison/Claymore Covered Call Fund (MCN)

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All Comments on MCN

  • commenter
    etf admirer
    May 13 12:23 PM
    My Website
    Exchange-Traded Funds and Closed-End Funds by Asset Class, Type and Provider [view article]
    can you please update this list? thanks. Reply
  • commenter
    SeekingAlpha
    Editors
    Apr 06 05:16 AM
    My Website
    General Discussion on MCN
    Is this a buy or a sell? Reply
  • commenter
    FL SHRHLDR
    Apr 04 09:27 AM
    More on covered call funds (mentions MCN, BEP) [view article]
    I agree. Let's see how this all plays out. I think another factor is the rather miserable market action. Reply
  • commenter
    mavericks
    Mar 28 11:24 AM
    Keep an Eye on Madison/Claymore Covered Call CEF [view article]
    MCN's NAV performance has been pretty mediocre on a longer term basis. I would stick with the IQ Investment Advisor funds. My favorite is DPD which emulates the DJIA. Pays monthly which is an advantage since it won't drop too much when it goes ex-div. I also trade around BEP & BEO which can be big movers up & down and will terminate in 2010. QQQX has the most upside since it is tied to the QQQQ's and trades at the biggest discount. All of these are covered-call funds...some use indexes, others write calls on individual positions. EBI & ETW are my favorites in other fund families and both give you international exposure. There are others I follow but after alot of trial and error, I feel these have the best risk/reward. Like stocks though, you've got to pick your spots. Reply
  • commenter
    User 110789
    Oct 03 06:54 PM
    Exchange-Traded Funds and Closed-End Funds by Asset Class, Type and Provider [view article]
    Are there any EFT funds that are purelt composed of vietnam companies? lasmatas@yahoo.com Reply
  • commenter
    Richard Shaw
    Jun 15 12:20 PM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    I did not mention BWV in this article, but covered it in a follow-up article at:
    www.qvmgroup.com/inves...     Reply
  • commenter
    KillerKev
    Jun 15 09:45 AM
    An In Depth Look at the New Covered Call ETFs [view article]
    You did not mention the new ETN with a lower fee than other strategies(75bps):

    The iPathSM CBOE S&P 500 BuyWrite IndexSM Exchange Traded Note (ETN) is expected to begin trading on the American Stock Exchange (AMEX) on or around May 23rd under the symbol "BWV". It will be the first ETN to offer investors cost-effective, tax-efficient exposure to the CBOE S&P 500 BuyWrite IndexSM. The index tracks the total return of a hypothetical "buy-write", or "covered call", strategy on the S&P 500® Index.

    A buy-write strategy can help reduce losses from downside market performance in an equity portfolio. And now it’s as easy to implement as placing a single trade.

    The new ETN will offer:

    Risk reduction: Reduced volatility compared with the S&P 500® Index.
    Ease of use: Exchange traded, eliminating the need to manually execute and manage a portfolio of stocks and options positions.
    Tax advantage: Will not make taxable distributions, enabling investors to control the timing of taxable events related to their investment in the new iPath ETN.
    All iPath ETNs offer:

    Transparency
    Cost efficiency
    Tax efficiency
    Daily exchange liquidity
    Get the BWV Term Sheet and preliminary pricing supplement.     Reply
  • commenter
    Richard Shaw
    Jun 14 04:13 PM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    I wouldn't recommend worrying about the end of the term of this fund. It was launched in 2005 and will be around long after you have made any investment. If you in the fund 10 years from now, look into that question if you wish.

    I doubt that the fund will stop writing calls, because that process is why the fund exists. They would have to make changes that probably would require a shareholder vote. I can't imagine that possibility effecting the price-to-nav relationship.

    Note that covered call funds exceed the performance of the underlying index in a sideways market and in a declinging market (although they do not limit the downside), but they cap the return on the upside.

    If you have questions that are not answered by published documents, the best thing to do is to contact the sponsor. Typically, you can get the info you want "straight from the horses mouth".


    S&P 500 Covered Call Fund Inc
    800 Scudders Mill Road
    Plainsboro, NJ 08536
    P: +1 609.282.5904


    Fund web address:
    www.iqiafunds.com/fund...

    INVESTMENT OBJECTIVE
    The Fund's investment objective is to seek total returns through a covered call strategy that seeks to approximate the performance, less fees and expenses, of the CBOE S&P 500® BuyWrite
    IndexSM (the "BXM Index").


    INVESTMENT STRATEGY
    The Fund will pursue its investment objective principally through a two-part strategy. First, the Fund will invest the proceeds in all of the common stocks included in the S&P
    500® Index weighted in the same proportions as the S&P 500® Index and/or other investments that have economic characteristics similar to the securities that comprise that Index. Second, each calendar month during the term of the Fund, the Fund will write (sell) one-month call options on the S&P 500® Index ("Written Options").     Reply
  • commenter
    Eric Huang
    Jun 14 01:36 PM
    An In Depth Look at the New Covered Call ETFs [view article]
    Nice post (including revised blog & comments by Mr. Nusbaum). As a newbie, I am understanding better how this investment idea works.

    To me, seems like BEP is a good option if you're looking to roughly match SPY performance with less volatility, with the bonus of a 10% dividend, and don't mind the 100 basis points.

    Is there a point a few years in the future when BEP will stop writing covered calls and it's dividend, and simply become an index fund and revert to its NAV? (I read some posts expressing this concern a few months ago) What happens then? Wouldn't that reversion make relvant how the fund trades relative to the NAV, especially for your entry point into the fund?

    Thank you for sharing your opinion.     Reply
  • commenter
    Roger
    Nusbaum
    Jun 06 09:19 PM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    Mr. Shaw,

    Thank you for the update, I read it but was not able to leave a comment...not sure I have a login for your blog's platform.

    For anyone new to this, BXM sells at the money calls. There is another CBOE index with ticker ^BXY that sells calls 2% out of the money.

    Additionally these indices exist in other countries, like Australia and a couple of others. I am hopeful that BWV from Barclays works out in terms of tracking. BEP has had some wild swings with its discount/premium to NAV. It looks like it has a 14% premium now which I'll pass on.

    Thank you again for your time.     Reply
  • commenter
    Richard Shaw
    Jun 06 05:55 PM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    Roger,

    I reflected on your comments and decided to redraft my blog on this topic. Since my principle purpose was to review and discuss the covered call strategy, I realized from your comments that by mentioning several funds, but not all of the funds in the category (many of which are following multiple simultaneous strategies), I was diverting attention from my principle point. In that respect you were correct to say that I was off the mark.

    Consequently, I have totally rewritten my blog article to focus exclusively on BEP and BWV, which describe themselves as strict adherents to the single strategy of S&P500 BuyWrite.

    Your comment helped me focus on that point while leaving out essentially extraneous information about other funds which could be the subject of another article another time.

    Thanks.

    If you are interested, the revised blog article is at:

    www.qvmgroup.com/inves...

    Richard     Reply
  • commenter
    Richard Shaw
    Jun 06 10:32 AM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    Roger,

    Picky is good. Your suggestion that I should have stated that the fund are CEFs is appropriate. I am aware that there are more funds of the type, but I wasn't trying to make an encyclopedic study of the class, but to discuss features of the class. The particular funds used were actually selected by a client who received a proposal from an advisor who chose those funds as the best choices in the class. As you often do in your own blog, I was utilizing a real situation to discuss a theoretical point. I admit to conservatism by not accepting funds as necessarily mature with 2-3 years of history. That conservatism is particularly important in my with this class which seems to cyclically outperform and underperform the underlying index. This class has done well in the last 2-3 years during a period of cyclic outperformance. Because they have "juiced" their performance relative to the BuyWrite index, I would like to see how they do in period of underperformance of the strategy -- would their underperformance be a magnified to the downside as they have been to the upside? How the funds to relative to NAV is not important to me, because all I can experience is the price. are the price and distributions. Total return versus the benchmark index is what counts for me.

    I edit my blog to properly note the type of fund as you suggest, and add a new post to deal with the cyclic performance issues that support my conservative view of time to maturity for this class of funds. If you would like to save me some time and email me the list of other funds in the class, I will do a more complete study (richard.shaw@QVMgroup... Thanks for the observations and keeping me on my toes.

    Richard     Reply
  • commenter
    Roger
    Nusbaum
    Jun 06 09:13 AM
    My Website
    An In Depth Look at the New Covered Call ETFs [view article]
    Mr. Shaw I believe your use of the term ETF is a tad confusing especially as you correctly note that these funds are CEFs in your table at the end.

    As far as new; MCN's inception date is 7/27/2004, LCM 1/26/2005, BEO 9/28/2005, DPD 4/26/2005, FFA 8/24/2004, BEP 3/31/2005. How much time before a fund is not <em>new</em&g...

    I would add there are probably another 20-30 funds in this genre.

    To really know what value the fund management is adding would you need to char the NAVs as opposed to the market price?

    I apologize for being so picky but the article seems to miss the mark.     Reply
  • commenter
    Ralph F
    Jun 02 06:06 PM
    BuyWrite ETN (BWV): A Buy -- If It Can Track The Index [view article]
    If the accrued dividends can be treated as a capital gain, that alone makes it more attractive than the closed-end fund. Reply
  • commenter
    Roger
    Nusbaum
    May 30 07:26 PM
    My Website
    BuyWrite ETN (BWV): A Buy -- If It Can Track The Index [view article]
    Barclays thinks so of course but I have not found any commentary from disinterested third parties that feel likewise. I should also note that I haven't found any commentary that says Barclays is wrong either.

    So basically no help here.     Reply

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