This cut really just puts the Eaton Vance funds comparable to alot of other buy/write funds in terms of yield.
The Nuveen buy/write funds JSN, JLA, JPZ, JPG, DPD & DPO for example have also cut their dividends twice over the past year or so (as have other fund families like ING) and now operate at 9.3% to 9.6% yields with only slight discounts to their NAV. In fact, a couple of the Nuveen funds were actually at premiums before they went ex-div a day ago. Comparably, ETV should actually RALLY on this news at a 9.8% yield and a 5.2% discount! Probably won't happen, but I do think the downside is limited.
I agree that the downside is limited. I remember last year when EV announced the distribution cuts for these funds, there was heavy trading volume, but the prices did not tank as we expected.
If we want to hold these long-term, I think the distribution cuts are a positive. Now we don't have to worry that the funds are overdistributing and eroding the NAV. That's not what I want if the stock market is going up.
Strange times and I wonder if the "panic" will spread? The good news about most CEF investors is they are pretty knowlegeable about the investments they are in an not prone to panic. But I wonder ata dividend cut at this point in a turbulent market. The least bad news seems to roil the markets and is this just too much negative? A bunch of EV funds cut the divi last night we will see.