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American Capital Agency Corp. Message Board

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  • mmichaelr mmichaelr Jan 17, 2013 12:59 PM Flag

    High Dividends

    89% of CFP is in other CEFs. The effective expense ratio is around 2.5%. During 08-09, 93% of the distribution was return of capital. Recently they have been making rights offerings and using that money received to support their distributions. A number of the CEFs it holds can be bought at a discount to NAV.

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    • macbride my opinion is worth what you are paring for it. Closend funds can be a trap i would not consider one above NAV. The only closed end fund i have invested in is FFC a Preferred stock closed end fund. I would buy back in when the PPS gets down or below NAV.

      • 2 Replies to mr.phil2u
      • Macbride when a closend fund has a premium it means investors are paying more for a asset than market value. With a open end fund like a mutual fund you pay what the NAV is each day. When you sell you have to find another investor thats willing to pay more for something than its worth. Good luck !!!!

      • I can't locate the post on this board which referred to the danger of financial trust preferred funds (due to the calling of the trust preferreds by some banks). There is a post on the PGF board regarding the different index that this CEF goes by which doesn't subject itself to that negativity.
        Plus, this CEF is trading closer to its NAV than FFC. Is the main reason why you chose FFC over PGF due to its higher yield by about 2 percentage points?

        (Right now, I just have a small amount with PGF, bought at 18.48. Some other preferreds I have are with REITs. AGNC, MTGE, WMC, AMTG, NLY are held in common shares. PGF is the first financial preferred I have ever bought. Even before the bank trust preferreds were called in, I didn't buy them though their yield was high due to the high premium the preferred was trading at.)

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