I didn't buy from A.G.Edwards,but I'm so glad I didn't buy more than I did. As for A.G.Edwards, I had a retirement account with them that was a total disaster. I don't think they keep track of what their brokers are doing. My broker lost half of my retirement account in less than 15 months back in 2001 & 2002 all the time covering his tail so he couldn't be arbitrated. When A.G.Edwards was bought out, he was gone
Hello and thanks for your comment / question ...
Reading from page 15 of the fiscal 2014 annual report dated 10/31/2014 and audited :
2014 portfolio turnover - 99%
2013 portfolio turnover -192%
2012 portfolio turnover -310%
2011 portfolio turnover -367%
2010 portfolio turnover - 487%
My memory is a bit hazy but I believe I saw that 58% number you referenced on the semi-annual report thru April 2014 ..but that was NOT annualized ...hence the 112% number I projected on AOD for the fiscal year. ( was off a bit - LOL )
Dividend capture style funds will typically have much higher portfolio turnover percentages ...but the overall stock market was decisively moving up in 2010, 2011, 2012 and 2013 ...and my contention is that by rapid fire trading in the 300-500% annualized percentage area ....AOD essentially completely missed the general market recovery ...
The four year period between Jan 2010 and Dec 2013 saw the unmanaged S&P 500 produce a total return of + 76.18% or +15.24% per year ...
That same four year period ( 2010 -2013 ) saw AOD produce a ( -21.73% ) Total return or ( -5.95% ) per year ...
That underperformance is simply damming ...and I think it reveals the fundamental flaw with " capture " funds with high turnover ...They don't have a holding period or duration of investments that allows them to see significant asset appreciation ...Example - Apple is the biggest holding of this fund at over 2% ...and has been for years ...but they cant seem to book much of a profit on selling the shares ...my guess is that fund management has been dumping shares of Apple and re-buying them 10 -20 times over the past five years ...perhaps more ...( just a guess )
As a result ...they missed a plus 300% price increase on their singe biggest holding ...in effect ...they make a few bucks ...but by rapid fire / high velocity trading ...they missed the huge market price upswing with Apple.
Hope this proves helpful - Thx for comment / question - Mike
Thanks for the reply on my earlier comment on AOD.
To address your question about the performance metrics ; I use Dividend Channel website which has a very useful performance tool that shows the hypothetical value of $10,000 invested on a specific date and the impact of reinvested dividends to compute the Total return of the fund.
AOD produced a + 10.68% Total Return in calendar 2014 as compared to a + 14.56% return for the S&P 500 index with dividends reinvested,
Since March 9, 2009, when I initially invested in AOD ...the fund has a cumulative +107.68% Total Return as compared to the S&P 500 which has a cumulative +240.34% Total Return. That works out to about +13.39% per year for AOD versus + 23.44% for the index.
Its not perfect , but the disparity of performance comparison between the unmanaged index and AOD is frankly damming ...It should also put to rest your contention that the " past few years have been exceptionally difficult because of low interest rate environment."
Alpine brought in two new portfolio managers a couple of years ago ...and in their respective letter to shareholders promised to make significant changes to their investment tactics. Initially they did just that ...increasing the monthly dividend , launching a share buy back plan, reverse splitting the stock 1:2 , reducing the 650% annual portfolio turnover ....increasing the NAV by over +13% in their first year on the job. I was encouraged ...
Then, the latest annual report illustrated that they had completely STOPPED buying back shares ...were once again using a super-heated portfolio turnover in the 112% turnover area ..and incredibly ...were now using leverage or borrowed money to in effect pay the dividend.
This seemed like a radical departure from the April 30, 2014 semi-annual report letter to shareholders and reflected the management decision to essentially not worry about the jumbo level discount to NAV ...and even take on ADDITIONAL RISK .
Enough is enough ...I am OUT.
I don't know where you came up with year end no's since co.reports on 6 mo. basis. I reviewed
last published report ending 10/31/14. In any case comparing any fund to S&P 500, especially
a CEF, and particularly AOD which is a dividend focused fund is no criterion. This past few yrs have
been exceptionately difficult because of the low interest environment. The fund's holdings seem decent
enough & attempt to minimize risk .Another problem for AOD is foreign holdings which are subject
to currency translations, which is tricky business at best. Within the parameters of fund's objective
I don't think they could have done much better, and certainly could have done a lot worse. At least the
hemorrhaging has stopped. Anyway last reported NAV of $11.16 after div payout is comparable to
a year ago, which in the past has not always been the case.
I think what I'm getting at is this is the nature of this investment, If so, than looking for bigger gains
best to look elsewhere. 6.78% annual div seems safe enough with such a conservative portfolio &
there's always the possibility, even if remote, they could make big cap.gain. BTW ROC is inherently
built in.& cannot be avoided. I play AOD as a trading stock, buy low sell high. Might try RAS. GL
The hard numbers are in for 2014 and the results show that AOD did poorly as compared to the S&P 500 index with dividends reinvested.
Specifically - AOD produced a + 10.68% Total return whereas the S&P index returned +14.56% for the calendar year.
That is a 388 basis point difference over a trailing 12 month basis ...and an aggregate -10.05% PER YEAR below the S&P 500 index over the past SIX YEARS of the holding period.
Shareholders like me have given Alpine management many years and lots of second chances to get the story straight and start to compete with the unmanaged index.
The new portfolio managers have FAILED to even come close to the index by way of comparison ...after two years of tenure and their upbeat 2013 letter to shareholders promising effective changes ....what a disappointment is the nicest thing I can think to say about them.
Most disturbing was the recent use of LEVERAGE to pay the monthly dividends ...and the complete abandonment of the 10% share repurchase program after only six months of buying back shares.
That sent a message to me that the new managers were NOT that committed to reducing the outrageous discount to NAV as many other closed end funds have done.
This fund seems to be marginally ok in a good market ...and disastrously in a flat to weak market. There seems to be no upside to continue to hold the fund, not even the hope of a good market as they just missed 2014 by 388 basis points ....yet again and similar to 2013, 2012 2011 ..you get the idea.
Used the share lots purchased at a higher price to wash the capital losses incurred against some nice 2014 capital gains earned ...that might be the best thing AOD and Alpine management has done for me ...providing capital losses to offset taxation on most other investments with a gain.