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ETG: A Volatile Leveraged Dividend Fund

Published Thu, 11 Jul 2019 15:09:56 -0400 on Seeking Alpha

The Eaton Vance Tax-Advantaged Global Dividend Fund (ETG) is a leveraged close-end fund that primarily invests in dividend-paying stocks around the world. Despite returns that have handily outperformed other global equity indices, the fund may not be such a great investment. After taking into account leverage, the fund's performance looks less impressive, and it may be more volatile than investors expect. Additionally, the fund has consistently traded at a discount to NAV over the past several years, so holding the fund in hopes that the discount eventually disappears may not be a viable strategy either.
ETG Overview
As we said in the intro, ETG focuses on investing in dividend-paying stocks and, indeed, eight of the top 10 holdings pay dividends.

(Source: Fund fact sheet)
ETG is also a true global stock fund with a majority of holdings classified by it as foreign stock.

(Source: Fund fact sheet)
The dividend yield of the fund is not disclosed prominently; however, using the financial statements from the fund's annual report, we calculated it has a dividend yield of somewhere around 3.8%. This figure isn't exact as it includes the deduction of foreign taxes and also includes dividends from preferred stock. Additionally, the yield we calculated is based on the fund's end of fiscal year AUM. However, the calculation is accurate enough to assess whether the fund is indeed following its stated investment, and it is.

(Source: Fund fact... Read more