Hmm up 19% since you sold. I'll just sell of some of my holdings if I need the income. 19% in 8 months is fine with me!
I don't claim to be a financial expert,
but I found the following basic information which may help explain what appears to be an anomaly ..........
"an ETF allows in-kind redemption by big institutional investors. This prevents the fund’s price from deviating much from its NAV. If the NAV got way above the share price of the ETF, then large investors would buy up the ETF shares on the open market (driving up their price) and exchange them for the component stocks. And vice-versa."
"However, with a CEF there is no guarantee that the price at which the shares trade is equal to the value of the stocks the fund holds. In fact, the net asset value of a CEF — the market value of all the fund’s assets divided by the number of fund shares outstanding — frequently deviates by 5-10% from the share price at which the fund is trading."
The following informative website has so more "light" ...........
...... Life is one "Long and Strange Trip" to quote one band.
So let me get this straight, if hypothetically 100% of DRWs floated ETF shares showed up for sale at once with no bids, it would have no effect on the ultimate transaction price(if it is strictly tracking its NAV)?? Doesn't make sense to me, open market transactions should always be affected by the desires and desparation of buyers and sellers. I could have placed a limit order to sell my shares at an arbitrary level, what's to prevent that? ETFs can trade at a discount or premium to their NAV, yes/no?So I fail to understand why on 3/14/12 on 10x volume of 550,000 shares, the share price fell only $0.50 off of $27.3. I lost far more than you since I bought high and sold everything when I found out about the first dividend drop, which happened to be equal to 60% of the total annual dividend payout,and was the nadir of the share pricing for the year. It seems to me, a select few knew this was coming and sold prior to the dividend loss....but I was convinced the fund would tank after this fact came to light. I called Wisdom Tree with the same WTF dividend question because it was "hidden" from any public domain news releases, it wasn't even reflected in the reported trailing dividend data on any of the stock tracker websites(because in the fine print, the trailing data was conditioned to a date favorable to delaying the adjustment by about 2 months). So now the share price is dropping along with the rest of the market. It's immune to a 2 huge dividend misses???
I got trapped by my outsider, naive perception that the loss in share price would be more than compensated for by the high yield, never dreaming that the winter dividend was asymettrically large and about to be missed .....my bad!!! Thanks for your commiseration and shared experence, one learns from mistakes like this..hopefully! BTW, thepublic domain distribuion yield has yet to be adjusted for the second dividend miss, so at 5%, it's still artificially high.
DRW stock price has basically just followed it's NAV, as it should (approx 23.20 in Dec to 26.50 now).
I initially purchased some DRW around $28 when the NAV was also around $28. I sold everything yesterday for a total investment loss of $173 (counting dividends from back-in-the-day).
Fortunately, I'm a masochist and have around 100 investments, where almost all have at least some income and many are for income only (REIT, BDC, Bonds, Preferred, etc).
Obviously I don't understanding "Passive Foreign Investment Companies" investments and therefore I should have stayed out of Global REITs like DRW.
Lucky this time.
Actually, I should be listed as 65/Male-FL but I can't figure out how to change it in Yahoo!Finance. I have not such problem in other websites.
Yahoo and I are at war since they forced the Yahoo!Finance mandatory upgrade a couple of months back.
I have been unable to find any crtical analysis of this ETF, any online research suggests you are getting into a honey of an investment. Of course now, the missed dividends are starting to get picked up in the public domain to adjust down the net annual dividend, but there was seemingly a 2 month lag. This is an insider's game as far as I'm concerned.
I Strongly agree with your sentiment, having been burned and sold out at a loss. I think it's worse than a turkey though....how do you explain the share appreciation after the first huge dividend miss? How now does anyone explain the relative share price stability after the second consective miss? Thanks for the link, new rule in place: nix any ETF containing "PFIC". Hope you didn't lose too much.....and considering that the share prices of the ETF went up after you sold(I assume after the fist miss), someone made $ on your sale!
I had to e-mail Wisdom(?) Tree to find out the DRW distribution status for March (their website had no information). I immediately got the following response:
"DRW did not have a distribution for March. The fund invests in PFICs (Passive Foreign Investment Companies) and their losses were deducted from the distribution. Gains are added in up years and losses are subtracted in down years. The link below is a good description of these PFICs below..."
Bottom Line ....This income (???) ETF is a real TURKEY!!! I'm now totally out. (at least 3 months late)
Let's face it, this ETF offers up no press releases that might inform shareholders of changes to what originally was a double digit annual dividend yield to a yet to be determined dividend, if it ever returns. Why the share price continues to escalate, only the majority holders know. On one day recently you may have noticed roughly 12% of the total float change hands with marginal downside impact. You never see huge volume of shares like that offered for sale without a major drop in price. Sounds like a sweetheqrt transaction. I'd never own an ETF having less than a $5B share float, seems like a few players set the market for this $100M cap. ETF.
Yes, I am really disappointed. Based on past history I thought it would be the biggest of the year. I bought it for the income since it had a fairly high yield. Their investor relatioins told me this:
DRW holds PFICs (Passive Foreign Investment Companies) in its portfolio. PFICs must mark to market each year (in Q4) and realize a gain or loss in those PFIC shares. PFIC loses are offset against PFIC gains, and then against portfolio income. The PFIC losses for DRW this year wiped out the gains and Q4 dividend income, therefore, no dividend distribution for 2011.
REITs In U.S. Outperforming, But Pockets Of Opportunities Abound Overseas http://chargedstreet.info/DRW