ziggy29 said:I can't imagine a dividend yield of 13% is sustainable. Either there was a very large one-time recent dividend distribution or else the stocks owned by the fund are very beaten down and likely to not be able to maintain their dividends.
Beyond that I'm not familiar with the fund so I can't comment on specifics. I just think a 13% yield is either a short-term anomaly or a red flag that there are some very weak businesses being held.
hogwild said:It pays a monthly dividend. The total dividends, per share, in 2006 was $1.574 and in 2005 was $1.51. The 2006 yr-end closing price was $12.80 and for 2005 was $10.44.
CybrMike said:I have owned this fund for a couple of years. It invests in stocks for at least the 60 day holding period so that it gets the 15% dividend tax treatment. The fund has a high turnover and high expense ratio but has done well for the last couple of years and has had a yield of 12 - 13 % for the same period.
Here is a link to morninstar to check out top 5 holdings (GE is one of them).
http://quicktake.morningstar.com/FundNet/Snapshot.aspx?Country=USA&pgid=hetopquote&Symbol=advdx
Ah. It's a fund that darts in and out of stocks that "buys dividends."CybrMike said:I have owned this fund for a couple of years. It invests in stocks for at least the 60 day holding period so that it gets the 15% dividend tax treatment. The fund has a high turnover and high expense ratio but has done well for the last couple of years and has had a yield of 12 - 13 % for the same period.
ziggy29 said:Ah. It's a fund that darts in and out of stocks that "buys dividends."
I knew there had to be something to it. Seems like that would cause the NAV to plummet in a down market.
Well, yeah, but in an up market the NAV increase can make up for the drop caused by a dividend distribution.FinanceDude said:Doesn't the NAV of mutual funds in equity funds in general "plummet" in a down market??
ziggy29 said:Well, yeah, but in an up market the NAV increase can make up for the drop caused by a dividend distribution.
In a market that's down 10%, something paying a 12% dividend might see a 22% decline in NAV or close to it. Ouch! I suppose it would make for some nice tax loss selling, though, since the taxed dividends are added to your cost basis.
Come to think of it, this might be a good fund for people looking not only to get gains capped at 15%, but also to create losses to offset capital gains.
FinanceDude said:Doesn't the NAV of mutual funds in equity funds in general "plummet" in a down market??