This is just for the sake of disscusion. These 3 other AC funds NAVs are up 3 cents each, and the 3 other funds are trading at a slight premium to NAV. Take a look at the portfolios of each. ACG being the 4th fund and the last. I do not own any ACG as of this time as I sold what I bought in Feb for $7.60 in april for $7.75. I needed the money for what I think will be a much better return but has 10 times the risk. The risk coming from the purchase of a tech stock. I find it odd that ACGs NAV is droping. I would like to know the true reason for it. If things keep going the way they are I am looking for ACG to go down to the $6.80ish level. And the only reason I am looking for this level is from looking at the charts and no other good reason. Here are the links to the portfolio's. http://biz.yahoo.com/prnews/020614/nyf052_1.html http://biz.yahoo.com/prnews/020614/nyf051_1.html http://biz.yahoo.com/prnews/020614/nyf049_1.html http://biz.yahoo.com/prnews/020614/nyf057_1.html
"I find it odd that ACGs NAV is droping. I would like to know the true reason for it."-oldgeez.
paying out substantialyy more than taking in reduces nav.......take it as fact until someone proves otherwise to you, for that is the way it is...tug
It looks at this time anyway I have to agree with you. I just can not see another reason for the drop. Also I think the only reason the share price is holding up is nothing more than the yield and need for greed. I would think the upcoming earnings report will be a real clue as to if a dividend cut is coming.
This is a lost cause. I'm slowely coming to the conclusion that individual investors DESERVE to lose their shirts. I've seen episodes of Barney and Friends that were harder to explain than acg's earnings. You know, you read stories aabout how innumerate Americans are but until you experience it first hand, it's impossible to believe.
What�s so funny is that high yield makes up for a world of confusion. For me anyway, I do not really put as much importance to the unrealized losses. They need 25 cents of earnings per quarter at this dividend rate. The Fund also announced a new schedule for its quarterly earnings releases. Under the new schedule, quarterly releases will be published 60 days after the Fund's fiscal quarter. The next quarterly earnings release will be published on August 29, 2002. We are not that far out till we see just what they will earn.
To make .92 in interest the fund would have to get 15% on it's nav. Remember, there are operating expenses. Since 22 year gov'ts and aaa corporates pay 6% (or less) they have to make 9% in gains, but those gains are already relected in nav. It's mathematically impossible.
On Mar 31, they had income of 51 mill and unrealized losses of 67 mill. That means they lost money in the quarter. Remember, it's an income statement. Income is money they recognised. That's interest and gains. Unrealized losses are just that, unrealized.
Actually, the beauty of exchange rated funds is their simplicity. They're forced to declare unrealized losses which opens up their books for all to see.
IN a bond fund, take nav and multiply it by an interest rate applicable to the same quality and duration bond that are currently out there and you'll get the interest they WILL MAKE. Any gains from interest rate moves will be unrealized gains but remember, ANY BOND OF A SIMALAR QUALITY WILL GET THE SAME GAIN.
That's why you don't buy gov't funds at a premium! (Or corporates for that matter) Junk is different
This will conclude my part of this discussion. The .638 cents in earnings generated last year do not take consideration the new money brought into ACG from the rights offering. Thus the projected earnings for ACG for this fiscal year could be .23 cents X 4 quarters = .92 cents. Good luck with your investing.
No confusion here. For the sake of disscusion lets cut to the chase and use one of our links. This link may explain why some are looking for $6 a share and have been for awhile. High yields tend to make people throw caution to the wind, and is also what create a premium in the share price. And that premium not only is related to the NAV but also is related to a need for high yield. This link is for full year to year eps that may help in the disscusion. http://yahoo.marketguide.com/MGI/mg.asp?target=%2Fstocks%2Fcompanyinformation%2F
You may be confusing ACG which is Closed End Bond Fund with a stock equity fund. The .23cents and the .15cents which you refer to are really net income from interest earnings generated by the bond holdings from which the dividends are paid. However, the .15cents represents income during the quarter of the rights offering and really should be ignored for our discussion purposes. IMHO the fact is that ACG generated .23cents during the first quarter. If one multiplies that times 4 one gets .92cents which is .07cents short of the projected annual dividend. However, that is not the only factor to consider when projecting the future dividend payout for ACG and the future NAV and market price of the fund. Other factors to consider include corporate bond defaults, rising interest rates, investor sentiment toward stocks versus bonds, etc.