Elliott

Why I Am Adding PGF and AGD to My Portfolio

I like to see three things in a closed end fund: a relatively stable NAV; a high distribution yield; and a market price below the NAV (discount). Since AGD only meets one out of three criteria I won't consider it, although I really do like the concept of international equity dividends.

Your article mentions that a positive feature of AGD is the lack of leverage and option selling. It's conventional wisdom those are bad things; however, I do think they can be good tools in the hands of fund managers that use them wisely. Take a look at this chart -- it compares the NAVs of AGD and DPO:

finance.yahoo.com/echa...;range=1y;compare=xdpo...

DPO uses leverage and option selling on the Dow 30, pays 12% yield, and is priced at a slight discount. The NAV for DPO is down about 5% in 2008 vs. 13% down for AGD.