As an alternative value investment, I'm noticing that the Nuveen and Eaton Covered-Call Closed-End Funds (JSN, JPG, ETW, ETJ, EOS, etc...) have come off of a general non-discount level of a year or so ago to now about 8-10% discount to NAV. These funds have expense ratios of between 0.75% and 1.1% and basically are buying large cap companies and writing calls against them and most of the ones I'm looking at are generating around 9-10% dividends with this practice.
Anyways, in this market, I'm looking for some defensive investments with income, and I think a 10% dividend and 9% discount to NAV seems like a good play to me given that many of the investments are large cap tech, which I'm buying individually anyways. Therefore, I picked up some JSN today.
I realize that some may think 0.75% expense ratio is a bit high, but I'd have a hard time in my portfolio keeping a covered call portfolio at that level on large cap covered calls like this.
Just an idea to look at that I thought I'd throw out there.
Thanks,
Grant |
