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iShares Trust - iShares U.S. Home Construction ETF Message Board

abccoll123 6 posts  |  Last Activity: Apr 25, 2015 11:37 AM Member since: Sep 18, 2008
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  • Last year, almost 20% of my MREIT ETF's distribution was actually worthless Return OF Capital ( ROC ) - and NOT dividend or capital gains. Which I found out only in Feb this year once I received the 1099. That's TOO late a disclosure for me.

    REITs were notorious for giving ROC, looks like MREITs too have picked up the habit.

    SEC needs to do something to force these dividend payers ( the MREITS and REITS ) to disclose this at the time of paying dividend ( or a quarter later ) - not thru 1099 a year later. It hurts the SMALL INVESTORs badly who are NOT SAVVY enough to GUESS that their current dividend probably has a lot of worthless ROC.

  • Reply to

    Book value is $13.10.

    by serpentine290 Apr 23, 2015 6:51 PM
    abccoll123 abccoll123 Apr 25, 2015 11:28 AM Flag

    Another reason could be that investors have - after opening their 1099's - found out that 20% of the distribution was actually NOT DIVIDEND - but just Return OF Capital ( not return ON capital ).

    My MREIT ETF gave same ROC last year - which means almost all MREITs are in the same boat.

  • Reply to

    VERY BAD STOCK

    by gqgerb Apr 21, 2015 3:21 PM
    abccoll123 abccoll123 Apr 25, 2015 11:21 AM Flag

    I think once the 1099's arrived and people opened it ( FINALLY ) and realized that out of that $1.20, ONLY 96 cents was actual dividend and rest was Return OF Capital (ROC), people did not like it.
    With 96 cents being the REAL dividend ( NOT $1.20 ), it means current REAL YIELD is 9.3%. With NLY - what I have seen over the last 4-5 years is that investors like a yield of 11%. For that, NLY needs to come down to $8.75. For a 10% yield, it needs to come down to $9.60.

    S&P looking more attractive on a after-tax basis. NOT chasing NLY at current price.

    I own a MREIT ETF - that too showed a ROC of almost 20%. So it is NOT just NLY - almost all MREITs are afflicted by this. Nowhere to hide in MREIT world.

    REITs were notorious for giving ROC, looks like MREITs too have picked up the habit. SEC needs to do something to force these dividend payers to disclose this at the time of paying dividend - not thru 1099 a year later. It hurts the SMALL INVESTORs badly who are NOT SAVVY enough to GUESS that their current dividend probably has lot of ROC.

  • abccoll123 abccoll123 Apr 25, 2015 11:05 AM Flag

    With 96 cents being the REAL dividend ( NOT $1.20 ), it means current REAL YIELD is 9.3%. With NLY - what I have seen over the last 4-5 years is that investors like a yield of 11%. For that, NLY needs to come down to $8.75. For a 10% yield, it needs to come down to $9.60.

    S&P looking more attractive on a after-tax basis. NOT chasing NLY at current price.

    I own a MREIT ETF - that too showed a ROC of almost 20%. So it is NOT just NLY - all MREITs are afflicted by this. No where to hide in MREIT world.

  • abccoll123 abccoll123 Apr 3, 2015 9:26 PM Flag

    Is the breakup of last year's distribution on their website - and if so where. I would like to see it before I find out I have been fooled next April.

  • abccoll123 abccoll123 Apr 3, 2015 9:21 PM Flag

    Wanted a simple YES or NO answer - did NOT get that unfortunately.

    Anyway, just because a company distributes 90% of its earnings to shareholders DOES NOT mean 90% of its distributions are coming out of earnings. A company could earn $1 and distribute $1.50 - meaning only 67% of its distribution is coming from earnings.

    As I understand, Return OF capital is junk - it has no value. I could have kept the money in my mattress with same result. Forget about dividend - it is not even as good as capital gains distributions.

    For NLY I see on their website that 20% of their distribution last year was "Other distribution" - meaning probably Return OF Capital - which makes their dividend yield 8% and NOT 10% as the market thinks it is. I don't see any breakup of distribution on AGNC's website - wonder if it is same story as NLY.

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