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Eaton Vance Tax-Managed Diversi Message Board

  • mike57dk mike57dk Oct 15, 2013 12:07 PM Flag

    Performance update ...and expectation / forecast thru year end ...

    We started the year at $9.37 per share ...and its trading at $10.38 at this writing of course the monthly dividends paid ....which should give us roughly $1.00 per share by year end 2013 it $2.00 per share total return / $ calculate holding period rate of return ...+ 21.3% if you received your dividends in cash ...reinvested dividends would likely make the return a tad better ...
    Fund management is buying back almost $5,000,000 per month of the shares and booking a nice unrealized profit as they carry out the 10% share buy-back ..( still have 6-7% left to purchase )
    The discount to NAV is still a robust 10% ish despite the funds best efforts to reduce the discount ...making this a fairly compelling income / growth play ...on sale at a discount to actual value ...a big discount ....
    Today's WSJ had an article featuring a major bond fund manager ...who HATES bonds because he knows that when interest rates begin to rise ...bonds and in particular bond based funds which have no maturity date will get horribly " whacked " ...but who is forced to hang in the bond market until the " music stops " and everyone is looking for a chair or a place to hide ....
    This fund uses ZERO LEVERAGE ....uses a monthly defensive position of SELLING about 7,000 S&P 500 index calls ...which go up in value when the market declines ...and most importantly ...holds a 99% position in " blue chip " stocks ...Google / Apple / IBM / Bank of America for example ...NOT A SINGLE BOND ....
    My contention is that " blue chip " and profitable stocks will weather the coming bond market nightmare fact ...investors will likely be attracted by the high monthly income and super tax efficiency of the fund ...particularly when Ms Pelosi's additional 3.8% tax on investment income ( NIIT tax ) starts to be fully understood by taxpayers started on Jan 1, 2013 but most taxpayers won't realize the impact until they begin to file 2013 returns ..probably a +15% impact

    Sentiment: Buy

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