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2% discount will Canada Goose online receive a windfall yield

Advantaged Global Dividend Income Fund NYSE

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canada goose outlet legit SummaryI going to keep pounding the table on this until some Canada Goose Coats On Sale smart money finally steps up. canada goose outlet legit

canada goose outlet germany I would like to hear from any institutional investor on why you would not Canada Goose Outlet swap ETO for ETG, buy canada goose jacket particularly when you see when ETO was last at a 6% premium. canada goose outlet germany

canada goose womens outlet This is the most absurd valuation difference I have seen between two funds from the same fund family that have extremely, and I mean EXTREMELY, similar portfolios. canada goose womens outlet

canada goose outlet toronto address I’m going to make this really simple. Sell the Eaton Vance Tax Advantaged Global Dividend Opportunities Fund (ETO), $26.06 market price, $24.43 canada goose coats on sale NAV, 6.7% premium, 8.3% current market buy canada goose jacket cheap yield canada goose and buy the Eaton Vance Tax Managed Global Dividend Income Fund (ETG), $16.92 market price, $18.30 NAV, 7.5% discount, 7.3% current market yield. canada goose outlet toronto address

canada goose outlet new york I’ve been harping Canada Goose sale on this swap idea for a while now, uk canada goose though I think the breaking point is about here. These funds are WAY too similar for one to be trading at 6.7% premium canada goose uk shop and the canada goose clearance sale other to be trading at a 7.5% discount. Now your first reaction may be why is this such a big deal? A roughly 14% valuation difference (+6.7% vs. 7.5%) should hardly make that much of a difference. And besides, ETO has the higher yield. canada goose outlet new york

canada goose outlet in toronto I would counter that by saying that the difference is greatly magnified because an investor buying a CEF at a 7.2% discount will Canada Goose online receive a windfall yield over and above what the fund has to pay at NAV while the investor buying a CEF at a +6.7% premium won’t even receive the yield the fund is paying at NAV. canada goose outlet in toronto

canada goose outlet new york city In other words, if canada goose black friday sale these funds had the exact same portfolios (and in some ways they do) and their NAVs and market prices rose and fell by the exact same percentage, the investor buying the CEF at a discount would realize a Canada Goose Parka higher total return than the investor http://www.canadagoosecanadaoutlet.com who bought at a premium and the difference would become greater over canada goose clearance time. The reason has to do with which fund can more easily make up the distribution reduction that occurs in both the NAV and market price when a fund goes ex dividend. canada goose outlet new york city

canada goose outlet online store review And just how similar are ETO’s and ETG’s holdings? Would you be surprised canada goose uk outlet to learn that all of the top 20 stock holdings of ETO representing 40% of the cheap Canada Goose equity portion of the portfolio are included in ETG’s stock portfolio, canada goose factory sale most of which are top 20 holdings as well? In fact, if you look at the top 40 or so holdings of both funds representing about 60% of each fund’s stock portfolio, there are only several unique positions in each (shown in red). canada goose outlet online store review

canada goose jacket outlet toronto And if you look at their preferreds and corporate bond holdings for each fund, representing about 20% canadian goose jacket of ETO’s overall portfolio value and about 17% of ETG’s, they are virtually canada goose outlet exactly the same in positions and weightings. canada goose jacket outlet toronto

canada goose outlet uk sale Which is why this divergence canada goose coats won’t last and why, Canada Goose Online if you own ETO, you should be swapping into ETG, even with a lower yield. You want more proof of how similar these funds are? Here is a 1 year NAV graph of ETO’s NAV (XETOX) (shown in blue) and ETG’s NAV (XETGX) (shown in red). canada goose outlet uk sale

canada goose jacket outlet Source: Yahoo! Finance, since not all data sources even include uk canada goose outlet NAV prices. doesn’t have to pay as much as a percentage). By the way, these graphs do not include any distributions, which would add approximately 9% to ETO’s total return and about another 8% to ETG’s. That spike down in ETG’s NAV on the far right was an anomaly, which I wrote about in this article, Confusion Leads To Another Opportunity In ETG. canada goose jacket outlet

canada goose outlet in uk And if you go back 5 years, you’ll see that ETG’s NAV has actually grown significantly faster than ETO’s, again because of the distribution yield difference. canada goose outlet in uk

canada goose outlet toronto Note: I have not found ANY data source that can graph total return NAV performances of CEFs. And if you now believe me, then let’s try and cheap canada goose uk explain why ETO’s Premium/Discount graph Canada Goose Jackets looks like this: canada goose outlet toronto

canada goose outlet store toronto While ETG’s Premium/Discount graph looks like this: canada goose outlet store toronto

canada goose outlet toronto factory Smart money, are you out there? canada goose outlet toronto factory

canada goose outlet orlando Disclosure: I am/we are long canada goose uk black friday ETG. canada goose outlet orlando

canada goose outlet black friday sale 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 canada goose store business relationship with any company whose stock is mentioned in this article canada goose outlet black friday sale.

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