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Eaton Vance Tax-Managed Diversi Message Board

  • jimbollini jimbollini Apr 29, 2013 2:22 PM Flag

    Looking as to why,,,,

    On a day like today, Dow up over 100, three top holdings GOOG +20, IBM+5, AAPL +15 and this one shows no upward movement. Do I need to get used to this? Thanks,

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    • Late reply. ETY price will move only if buying of ETY shares pushes it up. DOW, GOOG, etc, upward movement will increase the NAV, but will not have effect on ETY share price.

    • Repy to Jimbollini - Looks like ETY closed trading today at $10.44 per share ...a price level it has NOT seen since July 29 of 2011 when it closed at $10.45. ETY fund management has subjected us to THREE dividend cuts since that time ....but is also actively engaged in a monthly share repurchase plan since Sept of 2012 ...taking approximately $5,000,000 of the active shares off the market each month ( on average ) and they also switched to a monthly distribution of the dividend in Jan of this year ...all of which tend to disrupt the price movement of the stock ...both good and bad.
      Performance wise ...ETY did well in 2012 on a total return basis ...starting the year at $9.00 per share ...paying out $1.04 in dividends and finishing the calendar year at $ 9.37.
      YTD - Ycharts is showing the Total return performance of ETY at a + 11.37% return ....comparative to the S+P 500 YTD return quoted in the paper yesterday of 12.0% ...The Dow is Up 13.2% and the Nasdaq is UP 10.6% YTD.
      My point being that ETY has performed in line with the comparable indicies ...exceeding the S&P in 2012 and damm close ytd in 2013.
      The Net Asset Value has increased to $11.62 .....again a very nice improvement since the beginning of 2011 and a very positive sign of financial health for the fund ...( assets are growing significantly & number of shares in the fund are declining by about $5,000,000 worth each month for the next 4-6 months )
      Closed end funds ....and particularly funds like ETY - ( those with a bad reputation of cutting dividends and getting slammed in adverse markets ) tend to be a bit slower to react market price wise to positive market influences ....and long suffering investors who finally see a price rise in ETY tend to dump the shares when it hits certain " round " numbers $10 per share ....or $11.
      Here are the reasons to OWN the fund :
      1. Monthly dividends - annualizing to a 10% cash flow - ( get Paid for your time ! )
      2. Its greatly UNDERVALUED - priced at $10.44

10.53+0.09(+0.86%)Oct 21 4:02 PMEDT