ETJ: Tax-Efficient Dividend Fund At A Discount (Rating Upgrade)

Cain Lee
6.08K Followers
(14min)

Summary

  • I'm upgrading ETJ to a buy due to its attractive 8.2% NAV discount and positive NAV growth over the past year.
  • ETJ's 9% dividend yield is well-supported by earnings, with tax-efficient distributions ideal for income-focused, retired investors.
  • The fund's option strategy limits upside but provides steady income, making it less suitable for younger, growth-oriented investors.
  • Despite underperforming traditional ETFs in total return, ETJ offers diversified large-cap exposure and resilient payouts through market uncertainty.

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Daniel Grizelj

Overview

Eaton Vance Risk-Managed Diversified Equity Income Fund (NYSE:ETJ) is an option ETF that provides diverse exposure to high quality large-cap companies while simultaneously aiming to generate a high level of income from the S&P 500 Index. I

This article was written by

6.08K Followers
Financial analyst by day and a seasoned investor by passion, I've been involved in the world of investing for over 15 years and honed my skills in analyzing lucrative opportunities within the market.I specialize in uncovering high quality dividend stocks and other assets that offer potential for long term-growth that pack a serious punch for bill-paying potential. I use myself as an example that with a solid base of classic dividend growth stocks, sprinkling in some Business Development Companies, REITs, and Closed End Funds can be a highly efficient way to boost your investment income while still capturing a total return that follows traditional index funds. I create a hybrid system between growth and income and manage to still capture a total return that is on par with the S&P.

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.

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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