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Zweig Fund, Inc. (The) Common S Message Board

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  • yando1946 yando1946 Mar 31, 2011 4:16 PM Flag

    What happened?

    Anbody know what percent of the dividend is return of capital?

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    • macgardner@ymail.com macgardner Mar 31, 2011 8:12 PM Flag

      According to the disclosure form you receive, it's a high percentage, but it's an accounting "trick" to save on taxes. If you go through the Zweig holdings on a given day, the shares are selling typically about 15 percent below the current value of all the companies that are held. It's a little complicated to figure out, but it's adventagous to you as a shareholder regarding income tax liability. If the dividends are largely counted as return of capital, you pay no tax on that portion. My shares are held in my IRA, so the dividends aren't taxed anyway, until I start withdrawing anyway. I bought this fund about 25 years ago when it first was offered, rode it up, and down, but they have paid 10 percent, sometimes a little more, from day one. Their holdings looked really solid last time I checked it out, which has been several months ago. Usually the share price will drop by about 3 percent when the dividends are paid, but Zweig has gone up a bunch this week in spite of the dividend payment. Hope that helps!

 
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