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Paying Heed To Dividend Sustainability: CEF Weekly Update

Published Mon, 12 Jun 2017 11:16:26 -0400 on Seeking Alpha

We are seeing little change in the popularity/unpopularity of CEFs but a marked divergence in pricing for equity and bond CEFs indicates the trend of heavy capital inflows rising all boats may be nearing an end. In such a market, looking more closely at dividend sustainability, historical NAV performance, and capital gains/investment income is essential in picking the right CEF.
Average CEF Pricing
We have seen discounts shrink over the last two weeks thanks to a continuing bull market and capital inflows into closed-end funds. This has helped net asset values (NAVs) for funds rise while also helping prices meet or exceed those increases. On average, CEFs had a 4.19% discount to NAV, up considerably from 5.5% at the start of 2017:

Source: Closed-End Fund Association
We've also seen a particularly sharp rise in equity fund valuations, causing discounts to fall significantly in the last month; however, the pace of discount erosion has moderated in the last week, in part due to the fall in energy prices causing MLP and energy asset-focused equity funds to decline in both NAV and pricing:

Source: Closed-End Fund Association
The average equity fund discount of 5.18% is near the year low and is much lower than the 9% discounts that equity funds started 2017 with.
Bond funds have also seen discounts decline significantly in the last few weeks, but discounts have not moved much in 2017. Bond funds have also seen the rate of decline halting in the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
DIVIDEND ANDOME FUND 12.00   0.0 0.00 0.00 6.67
RMR REAL ESTATE INCOME FUND 20.04   0.0 0.00 0.00 6.66
PIMCO CALIFORNIA MUNICIPAL INCOME FUND 19.48   0.0 0.00 0.00 4.69
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III 10.93   0.0 0.00 0.00 4.45
BOULDER GROWTH & INCOME FUND 11.20   0.0 0.00 0.00 3.65
PETROLEUM & RESOURCES 15.85   0.0 0.00 0.47 2.98
ADAMS EXPRESS 15.95   0.0 0.00 0.20 1.27

DIVIDEND ANDOME FUND - DNI
DIVIDEND ANDOME FUND - DNI  


Older articles featuring Dividend Andome Fund (DNI):
JPS: A High-Yield (Yet Pricey) Closed-End Fund
The Chemist's CEF Report - July 2018: Treasury Yield Spread Continues To Narrow
Dividend Sensei's Portfolio Update 39: 3 Reasons You Should Avoid This Dangerous Type Of High-Yield Stock
Dividend And Income Fund: High Income Closed-End Fund With Discount Capture 'Alpha'
12 High-Yield Managed Distribution Policy Funds
24 CEFs Yielding Over 10% Trading At A Discount To NAV: Part II, 9% To 12% Discount

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