I believe their strategy is to "Milk the cow and get as much as they can to deliver the dividend they promise but it doesn't leave much strength left in the cow." So when the market spikes up their dividend capture strategy of rotation every 60 days to get the 15% favorable tax rate doesn't leave much for a value play or growth play. They do have value & growth stocks components in there but unless the market is going up full bore they can't seem to add value to the NAV.It seems they don't have enough in there to cover future growth so we see this very volatile drop and not a more stable upward price to the NAV as you would see in a value or growth mutual fund. Many funds re buy stocks for there funds to gather more shares and gather momentum and perhaps pay a smaller dividend per month or wait and pay a bigger dividend at the end of the year. ADVDX is very aggressive in paying a monthly dividend of say 10% to 14%. But I am sure they worry about the total return. That is why we are seeing the changes to their funds and minimums to get in. There has been suggestions that certain investors only want to get the dividend any cost and this can hurt a fund's value. We have had the markets shave off a lot of wealth off of funds since the 2000 crash and the 2009 crash.Initial pricing of funds can go down dramatically if they don't keep an eye on total return. I would keep an eye on this fund. If your in perhaps keep reinvesting to get back to being even or use the dividends to buy other funds. At the most drastic tactic and when appropriate get out. At the very least keep any eye on this fund and see what Alpine can come up with to raise the NAV and get a more livable total return.
I bought in 2009 at a low. My dividend reinvests more of the same shares automatic. I am still down nearly 35% of my investment. I bought into similar funds at the same time which are all doing quite well. There is no excuse for this funds poor performance. Seems like someone is skimming off the top here. I keep hanging in there for some hope that it will turn around. I would at least hope to see some return of my original investment. The holdings are hight quality which really boggles the mind how this fund keeps falling. It takes one step forward and two back it seems.
You said: So when the market spikes up their dividend capture strategy of rotation every 60 days to get the 15% favorable tax rate doesn't leave much for a value play or growth play.
That's it, in a nutshell. The fund focuses on the stocks with the highest dividends. Those companies tend to be lower growth companies. Plus, all that buying and selling creates higher transaction costs than for most mutual funds.
US law mandates that 90-95% of the dividends paid to the fund must be distributed to shareholders by the end of the year. That is why the dividend payment may appear to be, partly, a return of capital, but it isn't. The year-end income statement clearly shows that dividends paid to the fund exceeds dividends distributed to shareholders by a small amount.