have you seen phk? The republicans playing brinksmanship on US credit worthiness is scary stuff - China is not amused for sure. Deficit has to be raised or we default on bonds and other obligations. And the rumor mill is rampant on things like divy cuts but i think it is a very nervous market and a lot of us are piled in these things for lovely dividends since can't get a penny in interest. And show me something that is doing well these days eh? Scary - very scary.
Longer term: NAV is looking reasonable in its slight uptrend. Today NCZ's price is down more (in percentage) than other CEF's I'm following.
Realize that it's hard find/track Beta's for CEF's but they can be found and used in investment decisions. (Beta is volatility to market moves)
NCZ has a beta that is over '2' in morningstar.
At this point in the day all TBill rates are down so a move strictly because of the inflation fear or interest rate rise wouldn't seem to be a primary cause. Interest rate should rise in that one case.
That all major market are down around 1% does.
NCZ has many positions in their portfolio. This CEF has followed the same trading pattern over the last few years. I have NCZ and NCV.
I always ride NCZ wherever it wants to go, and sell NCZ over $11.00. When perm to NAV and dividend yield are maximized..it will fall. These are very predictable over the last two years.
They are tied to high yeild bonds for sure; however, they turn their inventory of bond holding rather quickly. Any increases in the Fed Rate will be absorbed in the fund quickly. The Nav should really perform when their Convertable holdings are exersized, given the continuation of the bull market. Thats when we will be making alot of money. Till then, sit back and enjoy the yield...I'm in this in the low 7.00's. Drip NCZ, trade NCV....
Good Luck to All Here
It's dropping because NCV and NCZ are into government bonds and with fears of inflation, the bond market will go down. So, bond-related CEFs are expected to sell off.
This is a nice pullback, opportunity to cost average yourself down and load up.
I almost bought more yesterday but felt it would drop further and it has. Looks to be bottoming if you look at the 5 day...very nice pullback here.
It has nothing (well not much) to do with their government bonds.
The selloff in Corporate junk bonds accelerated on Thursday and went into Friday, and will likely continue due to the weakening economy.
NCV and NCZ may test their 2010 lows soon; and I won't say that it will be a good time to buy them; however, I do plan on holding them since the dividend is secure (unless they are forced to sell assets, then all bets are off.)
NCZ is a great CEF; however, it is trading at about a 10% premium to NAV. It is also at resistence level.
I have owned this for a couple of years, and DRIPed the whole time...excellent return.
Go to cefconnect.com for more information.
NCV is also dropping. The stocks have basically the same management, so I assume that they are either "out of favor", or traders are rotating money for the beginning of the second quarter. Either way, I'll hold until the next divy announcement to see what that brings forth.