The ETRACS 2xLeveraged Long Wells Fargo Business Development Company ETN (NYSEARCA:BDCL) will soon be declaring its dividend for the quarter ending June 30, 2015. The dividend will be paid in July 2015. BDCL is an exchanged traded note that employs 2X leverage to generate exceptionally high yields. 41 of the 44 Business Development Companies that comprise the index portfolio upon which BDCL is based have announced dividends with ex-dates in the second quarter of 2015.
American Capital Ltd. (NASDAQ:ACAS) and Harris & Harris Group Inc. (NASDAQ:TINY) do not pay dividends..."
"...If fear and greed are the drivers of the financial markets, my view is that greed will eventually overtake fear and the high yields offered by the closed-end funds that constitute CEFL will rebound, providing significant returns for those who buy CEFL at current levels. My projection of the July 2015 CEFL dividend implies a 21.8% yield on an annualized compounded basis.
Of the 30 index components of CEFL, 29 now pay monthly dividends, only the Morgan Stanley Emerging Markets Domestic Debt Fund (NYSE:EDD) now pays quarterly dividends in January, April, October, and July. Thus, all 30 closed-end fund will be included in the July 2015 CEFL monthly dividend calculation. My calculation projects a July 2015 monthly dividend of $0.3528. The methodology that I used in this calculation is the contribution by component method....."
The UBS ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (NYSEARCA:CEFL) is trading at the lowest price since its inception in January 2014. The decline in the prices of the 30 closed-end funds upon which CEFL is based seems to be part of the flight from all things that could be hurt by higher interest rates, which could accompany improving economic activity. In an article, X-Raying CEFL (Part 3): Interest Rate Sensitivity, published June 23, 2015, Seeking Alpha contributor Stanford Chemist presents well supported arguments as to why CEFL "is not very interest rate sensitive, and investors therefore do not have to unduly ...."
The iShares Mortgage Real Estate Capped ETF (NYSEARCA:REM) will soon declare its quarterly dividend, which will be paid at the end of June 2015. The table below shows each of the 37 mREITs in the REM portfolio, the weight, number of shares, price, ex-dividend date, dividend amount and the dividend frequency from each component using data of June 18, 2015.
Multiplying the shares of each component by the dividend gives a dollar amount for each component. Some mREITs pay monthly. To calculate the amount that a monthly-paying component pays during a quarter the dividend is multiplied by three. The quarterly figure for an issue where the monthly dividend was changed during the quarter, such as AMERICAN CAPITAL AGENCY REIT CORP (NASDAQ:AGNC) is the sum of the three monthly dividends. One component, iStar Financial Inc. (NYSE:STAR), with a weight of 2.265%, does not currently pay dividends. Adding up the dollar amounts of the dividends for all 36 of the components that pay dividends results in $31,278,681. I have assumed that any earnings that REM received on the holdings of $5,853,189 in cash and treasury money market funds were negligible and have not included them in my calculations. Dividing the $31,278,68 figure by the 105,150,000 shares outstanding gives a gross dividend of $0.2975. Using a 0.48% net expense ratio reduces the quarterly dividend by $0.0137. This would imply a quarterly dividend, which will be paid at the end of June 2015 of $0.2838. On a trailing 12-month basis the annual dividend for REM would be $1.488. This would be a current yield of 13.0% for REM at a price of $11.43....."
•My projected June 2015 monthly dividend for MORL is $1.0739. There are some caveats, however.
•I view MORL as still attractive due to my outlook for interest rates and the discounts to book value that the mREITs are selling at.
•Even if short-term rates are increased by the Federal Reserve, it is not certain that long-term rates will also rise. This could actually increase the book values of mREITs.
As of June 18, 2015, all but one of the 24 mREITs that comprise the UBS ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN (NYSEARCA:MORL) and the Market Vectors Mortgage REIT Income ETF (NYSEARCA:MORT) have indicated whether or not their dividends will have ex-dividend dates in June 2015. NEWCASTLE INVESTMENT REIT CORP (NYSE:NCT) has not yet declared a quarterly dividend. I am assuming it will declare the same $0.12 dividend it has paid in the previous two quarters. Last month I did not include New Residential Investment Corp (NYSE:NRZ) because they had not yet declared a dividend with an ex-date in May 2015. However, they did so after I submitted the article.
Twenty of the 24 components will be contributing to the July 2015 article because they have ex-dates in June 2015. My projection for the July 2015 MORL dividend is $1.0739. This was done using the contribution by component method. This method is different from then the previous methodology used but should give identical results. The $1.0739 looks suspiciously high, since it would be the highest monthly MORL dividend since the $1.1045 paid in July 2013. The previous big dividend occurred when American Capital Agency Corp (NASDAQ:AGNC) was still paying quarterly and thus had a larger contribution to the big month dividends....