I'm not too worried about dilution as I assume this fund can always use the new money to purchase more of the underlying securities. The pricing of the new issue is problematic as typically they are priced below current market price to ensure their sale and this pulls down the price of the already existing shares as you've already stated. I was all set to increase my stake but now will wait for this issue to be settled. Not worried about commission costs to me as internet rates are pretty low.
with a discount of about 4% from net asset value while money market funds are paying .35%, 5 year CDs 1.5%, 10 year t-notes 2.3%, 30 year t-bonds 3.10%. The fund holds high quality stocks that will most likely produce higher dividends in the future.
The only tax form would be the broker provided Form 1099-DIV. (If you sell shares, then there would also be the Form 1099-B reporting the sale).
UTG is a closed-end mutual fund rather than a publicly traded limited partnership (which is typically the cause of tax time headaches).
Probably less expensive for them. It does save the current share holders any commission fees when buying the shares through the rights plan. The thing I worry about is the price set to purchase the shares before the rights expire. I think the last time they did this the price was lower than the current stock market price at the time and, thus, the market price dropped. The market price did eventually go back up, but that was a rising market in general. And, of course, there's dilution considerations with more shares in the float and what will happen to the amount of the monthly dividend.
UTG seems to raise the distribution about once a year. It's a great income investment.
We are getting a dividend of 6% ( amortized monthly) a year with a discount of about 4% from net asset value while money market funds are paying .35%, 5 year CDs 1.5%, 10 year t-notes 2.3%, 30 year t-bonds 3.08%. And there is the prospect of higher dividends in the future.
7.9% distribution (amortized monthly) discount from NAV of almost 12% (average 10-year discount +2.2%).
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gunne4, I agree with you. The Fed has kicked the can down the road again and I think its possible that the Fed won't raise rates anytime soon. I believe its a good time to purchase more UTG on any pullbacks.
over 6% amortized monthly. And it currently has a 7% discount from net asset value. It's annual yield is currently 117% more than the annual yield on a 30-year government bond.
u r right. I don't know why yahoo insists on the lower yield. I tried to point this out to them but they did not reply.
5 secs before the close the market , UTG is trading at 29.37 and it closes at $29.20. This trade didn't even show up on the trades before 16:00 The NAV value is down .34% and the market price is down 1.7%.
When interest rates rises the initial reaction always a quick stock sell off. That is the time to buy in. Even if you buy now, most of the selloff is already priced in. If your in for retirement income, or long term, you will be fine here. I'm in with about 5,,000 shares now and I'll buy more when and if a selloff happens.