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Pulling the trigger...

On Friday, I deployed some cash and initiated a position in TEI, a CEF in the emerging markets debt/fixed income sector. This holding comprises 4.33% of the portfolio and is currently yielding 7.8%. TEI's largest exposure is in Indonesia, but also has sizable positions in Argentina, Brazil, Peru and Mexico. According to its mandate, as much as 35% of the fund may be held in non-dollar denominated securities. To be perfectly honest, I'd prefer to see a higher percentage of non-dollar holdings, as I expect a weakening dollar, over the intermediate/long term, but given that my core holding on the fixed income side of things, GIM, another Templeton run CEF, has a much broader mandate, in terms of dollar exposure, this wasn't a "deal breaker" for me.

This sector has enjoyed a strong run up since March, so I'm hardly the first to this particular party, but my purchase price of $12.87 was at roughly a 4% discount to NAV. The discount of market price to NAV is one of the metrics I use when evaluating a CEF, and TEI is more or less in the middle of its range, in terms of this metric.