It isn't,really.This fund is about income,not capital appreciation.Apparently there are some in here who have built up $5 a share as some kind of breakpoint for this fund.The real concern for those of us who invested in order to take advantage of what it had to offer is that the dividends don't get cut anymore and eventually grow back to their previous size.The NAV will eventually grow higher as the market does.Anyone who wants to grow their principal faster needs to find a lower yielding fund.-dude
Actually, NAV is very important. Go back thru the previous posts for detailed explanations (some posters here have done some good homework for your benefit). I'll only give you 2 simple examples.
#1: ADVDX has a managed divi (they strive for $0.07 per month). Say ADVDX managers have $100 dollars to spend and buy 7 shares of a stock. Each share of stock purchased yields $0.01 per month (say it's a conroy like PVX). ADVDX has too sell this stock after the ex-date since it can not buy and hold stocks to meet it's $0.07/month goal (it's called dynamic or divi capture, etc.). Now if the NAV for ADVDX has not increased the next time it tries to buy the same stock next time, and that stock is say now $15 per share, then obviously they will not get $0.07 since they will not be able to buy 7 shares, more like 6. If ADVDX can not keep buying the same # of shares, or, if the stocks they buy start paying less money in yield, then ADVDX must buy either riskier and riskier stocks, and or, buy and sell even more in order to keep the divi income comming.
#2 If you have been following funds, open or CEF that exist soley for high-yield, you may have noticed that some have closed. If the NAV gets too-low, the fund managers don't get paid enough to bother, and the fund objectives just can not be met. Luckily for ADVDX, they have been able to avoid this because they didn't leverage.
As you can see, ADVDX is in a tough position since many of the stocks it likes to flip for divi have been rising much faster in the last 6-months than ADVDX has. Divi yields for ADVDX are starting to come at the exspense of NAV and unlike a CD, your piggy-bank in ADVDX MAY start to go ngative when the market quits going up (rapidly increasing market is the prime reason we are able to tread water or see any rise lately). If the fund lowers its divi more, the NAV may start rising, but then all of those who have been reinvesting their divis lose-out (the yield they expect later will be less). It's a tough one. Take a look at what yield you can get for a $1000 investment in ADVDX in April of this year, and what you could get in a B of A pfd. The yield has gone down a little for a $1000 investment in July for ADVDX, but it is about half for the B of A pfd. Why? and what does that mean for ADVDX? When you can answer this, you can start thinking about purchasing ADVDX. (Take a look at high-yield CEFs, people late to the market rally have no where else to go and have been driving CEF prices high above there actual value (premium to NAV). It's tough out there and ADVDX IS the highest yielding fund, CEF or open, you can buy