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Aberdeen Asia-Pacific Income Fu Message Board

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  • axzl axzl Feb 11, 2000 8:48 AM Flag

    Dividend cut?

    about Closed End Funds(CEF) that you may want to

    First, Equitilink manages FAX for
    management a fee.

    Second, the management fee is a
    percentage of the NAV, not the market value. Therefore
    management's first concern is with keeping the NAV as high as
    possible which IMO strongly indicates that they won't pay
    a dividend that results in the return of capital to
    shareholders for very long because it tends to lower the NAV
    which is the basis for their fees. I am not saying that
    they are not concerned with the market value, but
    market value concern is secondary to NAV

    Third, don't look for Equitilink or most other CEF
    managers to desolve a CEF because the market value is at a
    discount to NAV and it would be good for the shareholders.
    They are in business to make money for themselves
    first and foremost. No FAX, no jobs for

    Fourth, as long as interest rates are going up and
    depressing the NAV of the fund and as long as the Aust. $ is
    weak, I have a real problem seeing how FAX can increase
    net income from operations to earn what they are
    paying in dividends or how they will generate any
    capital gains to make up the difference

    Perhaps you or someone else can point out something that
    I am missing. Also, understand that I am long FAX
    at about $5 9/16 and would like FAX to perform well

4.48-0.02(-0.44%)Feb 9 4:00 PMEST