The distribution was raised recently, a significant part was from capital gains. With close to a 2% expense ratio and the sharp decline in utility and telecom stocks over the last 2 weeks the math just doesn't add up for this distribution. It most likely will involve some return of capital or a reduction.
From my way of thinking it is time to sell and preserve your capitol as we all have a good return on this equity. I called the investment company and they are very vague on some of the expenses. I think they are making a killing off of what they are charging us to run this fund. Been a great ride but red flags are rising. Hopefully someone with more inside knowledge can prove me wrong, but the math does not look good.
The undistributed net income is already negative so yes, some of the dividend is going to be giving you back your capital. Whether it is gains or principal, either way the distribution is misleading and clearly a marketing tool for the fund.
I may be wrong, but I still like the issue,it has a good track record..the service fee could be lowered a bit, but then again if the big guys don't make money then we won't either...hang in it's a good run fund....Hope i'm not wrong I own it for quite some time....
oops great call, since you made your great call fund is up 3 or 4 percent. let me see they raised the divy so they could cut it later, and sucker everone, just because att or vz , or mwe vz or any other holdings goes down doesnt mean the divy goes down. always love when people start talking if the diviend is sustainable, maybe they had some money left after their last offering and bought some more shares at a lower price dont know. agree that i dont like 2 percent service fee but they will probably pay a capitol gain in dec. as they have in the past. all income funds took a hit recently and i suspect that greed will eventually aply to all funds and people realize that the world only ends once. in the mean time i will continue to collect the monthly div and apply to future purchases.
Good luck. They will have to sell high and buy low and get it right 90% of the time. Possible but it is risky. I will continue to sell into strength and buy the individual securities as the expenses are too high. Best of luck.