I follow all of the CEF's and made the prediction that ERH would cut its dividend. IGD is a completely different beast. IGD derives and pays its dividend from writing call options on individual securities. If they want or need more income, they can sell a higher coverage of each security. Of course, they give up appreciation in stock price by doing that. ERH derives its income from LEVERAGING up dividend yielding utility stocks and fixed income in its portfolio. IT DOES NOT SELL COVERED CALL OPTIONS. The ramifications are huge in a bear market. IGD is incredibly undervalued with a sustainable 21%+ yield paid monthly!!
As I understand it, the fund will buy shares at the discounted market price in the open market & will sell enough holdings in the fund at their NAV thus making for the fund the difference between the market price & the NAV (the discount).