Closed End Fund is similar but different from mutual fund. Like Mutual Funds, Closed-End Funds also has various classes such as taxable bond CEF, Municipal bond CEF, US Equity Funds, Non US Funds, etc. Unlike mutual funds, these closed end funds (CEFs) are traded like stocks or equities. The funds also can be traded at premium or discount from its net asset value (NAV). These all features may provide additional incentive to invest in these funds.
Top Performer Option Equity CEFs 2011 |
These funds usually provide high income and return from stock dividends, premium from selling call options, as well as increase of stocks values. Most of the fund may have high distribution rate or dividend yield. Please not some of the distributions may also include Return of Capital (ROC). These type of funds may be destructive to investor or shareholder.
The following top performers list has been compiled from variety of closed end fund website such as CEFA, CEFconnect, and Morningstar.
The 15 Top Performing Option Strategies Equity Closed End Funds June 2011 are:
The 15 Top Performing Option Strategies Equity Closed End Funds June 2011 are:
- Dow 30 Enhanced Premium & Income (DPO)
- PIMCO Global StocksPLUS & Income (PGP)
- Nuveen Core Equity Alpha (JCE)
- NFJ Dividend Interest & Premium (NFJ)
- ING International High Dividend Equity Income (IID)
- BlackRock International Growth & Income Trust (BGY)
- ING Global Equity Dividend & Premium Opportunity
- AGIC International & Premium Strategy
- BlackRock Global Opportunities
- EV Tax-Managed Global Fund
- NASDAQ Premium Income & Growth
- Dow 30 Premium & Dividend Income
- EV Tax-Managed Global Buy-Write Opportunities
- Columbia Seligman Premium Technology
- Cohen & Steers Global Income Builder
Funds details can be found on below table. The funds' information is updated on June 11th, 2011.
- Derivatives strategy risk
- Call option risks
- Index call option risk
- Market risk
DPO fund details |
As of June 2011, the fund total net assets are $309 million with 0% effective leverage. The fund annual expense ratio is 1.06%. The fund market price is traded at 5.02% premium from its fund’s Net Asset Value (NAV). Morningstar rates this Nuveen fund with 3 stars rating. This DPO fund also has a dividend yield of 8.7%. This dividend is paid quarterly. Some of this distribution is part of ROC.
The Top 10 issuers in this Dow 30 Enhanced Premium & Income fund as of May 2011 are International Business Machine (IBM), BNP Paribas: Counterparty Expos, Caterpillar Inc, Chevron Corp, 3M Company, United Technolgies, Exxon Mobil Corp, McDonalds Corp, and Coca Cola Co. The fund top 5 industries include IT Services, Aerospace & Defense, Oil / Gas & Consumable Fuels, Pharmaceuticals, and Industrial Conglomerates. The fund also has 64 holdings. Most of these holdings are 100% classified as large cap companies.
2. PIMCO Global StocksPLUS & Income (PGP)
While famous for its bond mutual fund, PIMCO also provides one option equity closed end fund. The PIMCO Global StocksPLUS & Income Fund seeks total return comprised of current income, current gains, and long term capital appreciation. The fund invests most of assets in equity index derivative instrument based on S&P 500 and MSCI EAFE indices. It may also use an option strategy. As part of Allianz Global Investors fund, this PIMCO fund’s manager is Daniel J Ivascyn. This fund also charges 2.88% annual expense ratio with 2.30% baseline expense and 0.57% interest expense.
PIMCO PGP fund |
As of May 2011, the fund top 6 sectors are non captive consumer finance, banks, non captive diversified fiancé, insurance life, independent E&P, and airlines. Top 5 fixed income investment breakdowns include mortgage (85%), investment grade corporate (34%), high yield (31%), non US developed (9%), and emerging markets (5%). The fund average duration is 3.39 years.
3. Nuveen Core Equity Alpha (Ticker: JCE)
Nuveen Core Equity Alpha fund |
The fund managements are INTECH Investment Management and Nuveen Asset Management. The fund managers are Adrian Banner, E Robert Fernholz, Joseph Runnels, Keith Hembre, David Friar, and James Colon. This closed end fund current total net asset is $230 million. The annual expense ratio of this Nuveen fund is 1.11%. The fund market price is traded at 3.12% discount from its NAV. It also has 4 stars rating from Morningstar. This fund is not a leverage fund.
JCE Fund’s performance:
- YTD: 8.42%
- 1 Year: 27.38%
- 3 Year: 6.84%
- Inception: 1.17%
4. NFJ Dividend Interest & Premium Strategy Fund (NFJ)
The Fund seeks current income with long term capital appreciation. The fund usually invests in dividend paying common stocks, income producing convertible securities. It also will use a covered call and options strategy.
NFJ fund characteristics |
This NFJ fund has 0.98% annual expense ratio with management fees of 0.90%. This fund has a total year-to-date return of 8.13%. This fund also has a yearly return of 25.40% in 2010. The annualized total return since its inception is 3.14%.
As of May 2011, this NFJ fund has 134 holdings. The average coupon as of June 2011 is 4.80%. The top holdings as of April 2011 are Intel Corporation, Pfizer Inc, Glaxo Smith Kline PLC ADR, Total SA Adr, Conocophillips, Royal Dutch Shell PLC ADRA, Johnson & Johnson, Lincoln National Corp, Ameren Corporation and Chevron Corporation. The top sectors as of March 2011 are Financials (20.40%), Energy (20.17%), Health Care (15.20%), Consumer Staples (10.66%), Information Technology (9.74%), Industrials (8.20%), Utilities (5.16%), Telecommunication Services (4.27%), Consumer Discretionary (4.06%) and Materials (2.32%).
5. ING International High Dividend Equity Income (IID)
The ING International High Dividend Equity Income fund is seeking current income with long term capital appreciation by investment in dividend producing securities or derivatives and through utilizing an options strategy.
ING IID fund details |
This fund expense ratio is 1.26% per year, consists of 0.85% management fee and 0.41% other expenses. The year-to-date return of this fund is 6.76% with the best performance in 2009 with 67.84% and its worst performance in 2008 with -39.68%. This IID fund has returned 20.51% over the past one year and 3.52% over the past 3-years.
As of April 2011, the top sectors of this fund are Financials (25.14%), Energy (10.58%), Industrials (10.20%), Materials (9.16%), Health Care (8.87%), Information Technology (8.51%), Consumer Staples (8.43%), Consumer Discretionary (6.36%), Utilities (6.27%) and Telecommunication Service (6.13%). The top holdings as of March 2011 are BHP Billiton Limited, Total SA, Royal Dutch Shell PLCB, Unilever PLC, Glaxo Smith Kline PLC, Rocher Holding AG, Novartis AG, Samsung Electronics Co, Imperial Tobacco Group, Sanofi and BNP Paribas. This fund has a total of 235 holdings with 55.00% of annual turnover.
6. BlackRock International Growth & Income Trust (BGY)
The Fund seeks current income and capital appreciation through investments in equity securities (up to half of its assets in emerging markets and up to a fifth in US) and through utilizing an options strategy.
Since its inception in May 2007, the fund has been managed by Thomas P. Callan. This BGY fund has total net assets of $1,129 million as of June 2011. The fund distributes a quarterly dividend of 13.03%. Currently, it is traded at 1.66% premium from its fund’s NAV. It has 1.13% annual expense ratio.
This BlackRock fund performance for the past 4 years:
- 2008: -41.95%
- 2009: 63.67%
- 2010: 1.57%
- YTD: 6.07%
It has recorded -2.21% annualized total returns since its inception. As of June 10th 2011, this BalckRock fund has 21.14% annual total return.
As of October 2010, BGY has a total of 181 holdings, and its top holdings are Blackrock Liquidity Funds, Tempfund, Cash & Cash Equivalents, Royal Dutch Shell PLC, Yara International ASA, Nestle SA, HSBC Holdings PLC, Imperial Tobacco Group PLC, Antofagasta PLC, Adaro Energy Tbk, Wpp Plc and Bumiputra-Commerce Holdings. The top country allocation of this fund as of March 2011 are Japan (14.20%), U.K. (14.00%), Germany (8.30%), Canada (6.40%), France (5.80%), Netherlands (5.20%), South Korea (4.60%), Switzerland (4.40%) and China (4.20%).
Disclosure: I am Long JCE as of June 10, 2011 (may buy or sell more in future date)
No | Fund Name | Ticker | YTD Rtn on Price | Distribution Rate | Premium / Discount | Market Cap |
---|---|---|---|---|---|---|
1 | Dow 30 Enhanced Premium & Income | DPO | 15.57% | 8.70% | 5.02% | $325M |
2 | PIMCO Global StocksPLUS & Inc | PGP | 8.59% | 10.09% | 53.39% | $256M |
3 | Nuveen Core Equity Alpha | JCE | 8.42% | 7.74% | -3.12% | $224M |
4 | NFJ Div Interest & Premium | NFJ | 8.13% | 9.75% | -3.20% | $1745M |
5 | ING Intl High Div Equity Inc | IID | 6.81% | 9.44% | 7.54% | $90M |
6 | BlackRock International Grth & Inc | BGY | 6.08% | 13.03% | 1.66% | 1129M |
7 | ING Glb Eqty Div & Prem Opps | IGD | 6.04% | 10.91% | 0.73% | $1071M |
8 | AGIC Intl & Premium Strategy | NAI | 3.83% | 11.24% | 3.04% | $142M |
9 | BlackRock Global Opportunities | BOE | 3.82% | 12.68% | 0.56% | $1239M |
10 | EV Tax-Managed Global Fund | EXG | 3.23% | 11.03% | -8.19% | $3149M |
11 | NASDAQ Premium Income & Growth | QQQX | 2.66% | 8.92% | -1.32% | $261M |
12 | Dow 30 Premium & Dividend Inc | DPD | 2.47% | 8.48% | 0.14% | $175M |
13 | EV Tax-Managed Glb B-W Opps | ETW | 1.86% | 9.94% | -8.77% | $1302M |
14 | Columbia Seligman Premium Tech | STK | 1.62% | 9.95% | -2.05% | $278M |
15 | Cohen & Steers Glb Inc Builder | INB | 1.27% | 10.12% | -7.60% | $255M |
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