I see a strange thing looking at the share pricing action between HPI and HPF lately. These two funds are nearly identical, have the same dividend, NAV is rarely more than a penny different, have the same holdings (in general). Yet HPI is seeing heavy buying with volumes much above normal and above HPF and with the price per share, today, at about 5+% higher ($1.08 as I am writing this... $21.51 vs $20.43). Currently, HPF is about at NAV (just a slight premium), HPI is well above NAV, and the third fund in the group, Preferred Income III (HPS) trading at a discount to NAV. HPS is trading about in tandem with HPF on a relative basis. HPI started deviating around the end of August. It looks like computer trading where the computer only knows price action, nothing about the security it is "investing" in. Any other thoughts?
I've held one or another and up to all three of HPI, HPF, and HPS since 2005. Typically when one gets a significant amount below NAV relative to the others, then I buy that one. I do trade, selling one or more if it goes to a significant premium to NAV relative to the others in the group. But a while back (early Aug) HPI went up and above NAV, so I moved from HPI into HPF like normal. But HPI has kept on going up and is now disconnected from the other two. I don't see any 'fund manager' who is not a total idiot buying HPI for the dividend and not buying HPF for more than 5% less when it pays the same dividend and has a slightly higher NAV at the moment. It has to be something other than an intelligent person that keeps buying HPI and ignoring HPF and HPS.