Who knows. This fund has traditionally sold at a premium to its NAV but now sells at a discount of 7%. Maybe some of the selling yesterday was from people wanting to get out of fixed income and into growth stocks.
As a long suffering holder of this dog, I think there must be something very wrong with the people who are alleggedly running this fund. It is time they spoke up told us what is going on. How can a bond fund fall like this in a rising market. How caan they be so consistently wrong. I have done much better than them with bonds and I'm an amateur.
So FUND MANAGERS get on this board and tell us what's up
feel alone let me share my feelings as well. As you know these funds are managed by Alliance Capital and their Wayne Lyski. If you look at gsf which is almost identical to acg you will see that it is in even worse shape. All or at least most of the closed end funds managed by Alliance have performed extremely poorly, even when interest rates were falling. You can also look at si, awf, awg, etc.
Like you I am suspicious as well. Let me share what I think is possible but of course I have no way of proving. Alliance manages both open end and closed end funds. Alliance sales people hate the closed end funds because they make commissions only by selling open funds since closed end funds trade like stocks. So the only reason Alliance manages closed funds is for the management fees that Alliance receives. But here is why I am suspicious. Lyski turns these closed end portfolios over 200% a year. Who is to say that the profitable bond trades are not shuffled from the closed end funds to the open end fund portfolios?
I think an SEC audit of these funds would be in order. I agree with you. No professional bond fund manager could do this bad and still hold his job if there wasn't a good reason, and that reason could be that Alliance open end funds are benefiting at the expense of the closed end fund shareholders.
Not in defense of them, but many and I mean many closed end funds are in terrible shape and sell at steep discounts to NAV. Another theory is that so much money is being poored into the high flying e-commerce and tech stocks that these fixed rate funds are just out of favor which will quickly change when the stock bubble bursts. People are getting used to earning 20, 30, 40, 50 percent returns on their investments. These bond funds and even the equity funds are dull and as it turns out seem to be riskier than the e-commerce stocks that are actually losing money and sell at high multiples to sales, not earnings.
Maybe sanity will return to the markets soon. Only time will tell. If it doesn't happen by second quarter of year 2000 I will have missed my guess.