GDV: Less Financial Risk Than Meets The Eye

Summary

• GDV is a closed-end fund that primarily invests in dividend-paying or income-producing securities.
• The fund has a significant exposure to the Financials sector (currently at 14.3%), but holds better quality collateral than other financials CEFs.
• Notably, it holds companies like Mastercard, Visa, and Berkshire Hathaway, which do not carry the same risks associated with traditional lending institutions.
• GDV is currently trading at a substantial discount to its net asset value (NAV) of -17.5% making it an attractive investment opportunity.
• The fund has an AUM of $1.8 billion and boasts a Sharpe Ratio of 0.36 (3-year) and a standard deviation of 19.7 (3-year).

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Thesis

The Gabelli Dividend & Income Trust (NYSE:GDV) is a flagship equity CEF from the Gabelli fund family. As per its literature:

Under normal market conditions, the Fund invests at least 80% of its assets in dividend paying or other income producing

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.