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Equity CEFs: Confusion Leads To Another Opportunity In ETG


  • I'm pounding the table again on the Eaton Vance Tax Advantaged Global Dividend Income fund until some smart money gets it.
  • Below I've outlined how ETG and its sister fund ETO are extremely similar. So why should ETO trade at a premium while ETG trades at a -8.0% discount?
  • Now there's more confusion.  ETG's NAV closed yesterday at $18.39, up $0.03. But some financial quote services show ETG's NAV down -$2.17 or -11.8% to $16.19.  That is incorrect.
  • I don't know if that's having an influence on the price today. But when Yahoo Finance, Wall Street Journal and other widely disseminated news sources are showing ETG's NAV down -11.8% yesterday, that has to be having some impact.

I've written more articles on the Eaton Vance Tax-Advantaged Global Dividend Income fund (NYSE:ETG) ($16.91 market price (real time), $18.39 NAV, -8.0% discount, 7.3% current market yield) this year than any other fund, simply because it is the best comparatively valued Eaton Vance (EV) equity CEF available to investors.

Comparative valuation may not mean much to investors. But over time, it can make a big difference in performance, particularly between funds that are in many ways very similar. There appears to be two main reasons why ETG trades at the lowest valuation of all the Eaton Vance equity based CEFs, and neither of these are very valid once you look into them. And now there seems to be a third reason that mysteriously popped up yesterday.

Let's start with the two more longer term misconceptions. The first reason why ETG seems out of place among the Eaton Vance CEFs is because ETG is lumped in with Eaton Vance's other mostly fixed-income CEFs like (EFF), (EFT), (EFR) and (EVV). However, ETG is really much more comparable to (EVT) and especially the Eaton Vance Tax-Advantaged Global Dividend Opportunities fund (ETO), $25.00 market price (real time), $24.58 NAV, 1.7% premium, 8.6% current market yield, two leveraged equity/preferred share CEFs that trade at higher valuations than ETG.

Though Eaton Vance likes to put ETG in the Taxable fund category along with other fixed-income funds and not the Managed-Distribution category, where Eaton Vance's equity based CEFs reside, including EVT and ETO. From a practical standpoint, there really is no difference now.

That's not to say it was always like that. But at some point, ETG morphed into a much larger version of ETO. How similar are they now? Here's Eaton Vance's Quick Reference Guide for its three equity dividend income funds and you try and

This article was written by

Douglas Albo profile picture
Looking for equity CEFs with the best income and appreciation potential?

Registered Investment Advisor since 2009. Prior experience includes 12-years as a Vice-President, Financial Advisor at Smith Barney from 1994 to 2001 and Morgan Stanley from 2001 to 2007.

Analyst’s Disclosure: I am/we are long ETG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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