It is called the Intraday Indicative Value which Morningstar does use. That Morningstar also has "NAV" is their error and it is probably because they do not distinguish between ETNs and ETFs in their format. Look at the UBS Etracs website for CEFL and you'll see that the correct term is Current Indicative Value or Intraday Indicative Value - not NAV.
You have probably done your due diligence and read all the materials about CEFL which included the statement that, "An intraday "indicative value" is used to measure the intrinsic value of each ETN and is for reference purposes only. Note: The market price (the actual trading price) of ETNs may be different from their indicative value."
The Indicative value is not an NAV. The NAV is calculated for open end and closed end mutual funds and exchange traded funds, not for exchange traded notes. The Indicative value changes throughout the trading day. For mutual funds the NAV is calculated at the end of the trading day.
Not quite. The reverse split is neither good or bad news. The split is simple a split. The bad news is retaining the same distribution on half the shares. That is, in essence, a distribution cut. That's why I sold.
The split doesn't matter to me except that the distribution was, in essence, cut in half. Typically if there is a reverse split the distribution would double. So the yield would remain the same. In this case that didn't happen. I rarely reinvested my distributions in shares of GABUX anyway. I used the cash to invest in other things and also took some cash IRA distributions.
I could have held GABUX and took the reduced distributions and then sold shares to equal the past distribution. But, I never sell shares of anything in my IRSs to take cash distributions. I only take IRA distributions from dividend income.
Thanks for the kind comments.
No, I didn't say that people should get out now. I said that GABUX isn't the best place for a portion of my portfolio right now when I think there are some better options available for me and for my investment asset allocation strategy.
And no, I didn't bail at the split news. I waited until mid-February to sell. I weighed my options and chose to sell and invest in a set of other investment vehicles.
I would always suggest that GABUX is not a good investment for people looking for capital gains or for younger investors. It continued to be a good investment for people who are seeking a regular income stream and can handle declines in NAV. The split doesn't change the fund's total return. It simply removes half the money paid out in distributions and keeps it in the fund assets.
You really are doing your best to try and paint a picture of me and what I wrote that is far far away from what I intended. Setting aside all of your personal unwarranted spewing, if GABUX was offering me a 13% yield and if that wasn't simply a result of a decline in the NAV from $10.60 to $6.50 then I might consider buying some GABUX. Sorry I didn't explain in detail what would have to happen for me to pull the trigger.
So cool your heated jets. I don't think that a 13% yield is going to come from GABUX declining post-split to $6.50. GABUX is now going to retain half of what it would have been paying out in ROC each year. If GABUX had been paying out $.035 a month rather than $.07 a month over the past five years then the NAV would be $.84 (annual) times five years or $4.20 more than it is now. If the NAV was over $9 right now and you had a yield of 4.6% or so would it be a good investment? How about if the distribution had been a penny less for five years? Then the NAV would be around $5.70 or so and the yield would be around 12.6%.
No matter what you say, it's all about an investors goals, their overall portfolio and total return. GABUX served me well and now other investments better meet my goals. GABUX might meet my goals again.
OK, so a market maker is messing up with retail investors. Now what are you going to do? I mean, so you think that and that means what for you?
The price dropping with the rebalance has been explained pretty well here by several people. I recommend going back through the archives in January and seeing what others had to say. It wasn't as simple as selling 100 shares of A at $10 and buying 200 shares of B at $5. There is no NAV involved with CEFL. This isn't a mutual fund. The assets owned on the rebalance day that reflected the index were sold for what they were worth. Then UBS had to buy assets to reflect the rebalanced index. It is much more complex than you are picturing.
Yes, it is a high risk investment. That is what the prospectus and other materials tell investors. So it isn't for everyone.
Are you just curious or do you think there is something about this that is important for retail investors to know? I really don't care much about it because a 3K ask size is pretty small. Since it's not a large ask it doesn't have any effect on my holdings of CEFL.
I did just check and there is one 3K ask size right now among many others. There probably is always an ask of 1K at almost any time on any day. There is a current ask for 3K at $23.92. Maybe someone is simply trying to sell 3K shares every day at some price set 4% above the previous close.
Sure, I can imagine buying back into GABUX. I sold because I prefer a +10% yield and there are plenty of opportunities for that in other securities. I decided to sell before this distribution and added to my CEFL, BDCL, DVYL, DVHL, and MORL exchange traded notes and picked up a few more shares of RSO.
If GABUX shows signs of getting back to a 13% or so yield then I might buy back. It would be a nice holding in my regular taxable account because of its tax advantages. Despite all the uninformed baloney that spews from a couple of people here the fact is that GABUX has had excellent total return in its history.
Apparently you think you are special. But, even your dividend will probably not be posted until closer to the end of April. While you are waiting you might want to do some of the due diligence that it appears you have overlooked as an investor in RSO.
Explain why total return is nonsense and a farce. I made a good profit in GABUX over the time I held it and I was well aware of the ROC distribution and how it weighed on the NAV. I benefited from the distributions and their tax-advantage. So explain too how GABUX is a classic ponzi scheme. But then you say you ignored me so you are unlikely to response. Your single post here and what do you come up with, nothing at all related to what I posted. Only your sad attack on me rather than addressing the facts. I will await your cogent reply.
I expected a run today up to around current book value at $5.07. With the reduced dividend covered and sustainable there was no reason for the pps to be below book.
Even better, run it on Morningstar. Yahoo charts only track the change in NAV and do not include distributions. Run it as total return on Morningstar and you will see why GABUX has been a stellar performer through the years as a reliable source of income that is tax advantaged.
We are not being paid interest. We are paid twice the distributions from the components within the index. The re-calculation of leverage changes the indicative value. The indicative value isn't the buy/sell price for the notes although it is usually close.
5 are up, one is down and one is unchanged and those 10 represent a little over 1/5 of the total portfolio.
So because oil happens to be low right now you think that is going to have a long term impact on GABUX? GABUX is for long term investors, not traders. You still haven't explained why the reverse split and distribution cut will cause the NAV to drop. I'm still waiting to hear your explanation.
Why on earth do you think the growth rate of GABUX will decline by 75% because of a reverse split (which really has little to no impact on the growth rate) and the cut in distribution actually raises the growth rate by reducing the ROC payout each month.
You are completely failing to bother to know what is in the GABUX portfolio. How long were you a GABUX shareholder?
That statement is simply ridiculous. The fund is not going to fail. Investors are not going to redeem $3.24 billion in shares. GABUX does not have a major exposure to oil. You don't even know what is in its portfolio. The fund will be around for a long time.