Chamois16

Alpine Global Dynamic Dividend Fund: Solid Low-Risk Strategy

The distribution and distribution yield are net of management fees. All closed-end funds initially trade at a premium to NAV because of the offering concession to underwriters. Most equity based funds eventually trade at a discount to offset management fees; ETG and ETO, which also exploit dividend capture strategies, are examples.

Experienced CEF investors wait until the market price has stabilized at a lower level relative to NAV, usually 120-200 days after IPO. The Haas Business School at UCBerkeley has a study explaining why this discount is normal, how it is computed and how long it takes to stabilize: faculty.haas.berkeley....