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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Bernie Goldberg who wrote (17095)	10/16/2001 4:01:17 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18931

Hi Bernie, Thanks. I checked at the library and Value Line does show the share price against the NAV over time on their graphs. You can see the cross-over points fairly clearly. ACG broke through its cross-over just recently when it headed into the high $8+ range. If I remember right it crossed to below NAV in the low $7s or high $6s. Jeff Weber has always had good things to say about closed end funds relative to AIM and the premium/discount swings. Best regards, Tom

To: Bernie Goldberg who wrote (17095)	10/17/2001 8:43:02 AM
From: rgammon	Respond to of 18931

Bernie, Thanks for the info. I am in PPR right now, but only with a tiny investment. I have decided that the volatility is greater than I can tolerate for the duration of my investment in the fund. I was using it for two purposes, one as a 'escrow' for some annual expenses, two as an impoundment for returned principle (accrued interest, mortgage principle payments) until sufficient funds accumulated for another investment. The 'escrow' is in a taxable account, the impoundment is in an IRA (can't add new funds). What is likely to disappear is the impoundment function, as the principle payments will be enough to buy a new mortgage in 3-4 months even when we return to a rising rate environment where refi's slow to a trickle. It is curious that investors have sold off PPR and VVR so that they are both selling at a considerable discount to NAV, about 13% for each. This seems to suggest that investors are not willing to pay a premium for these funds when the dividend will be falling in the coming months. Note that these funds are ultrashort bond funds, buying corporate bank loans, loans that have an interest rate reset provision that yanks the interest rate on the loan to Prime + ?? every 30-90 days. Current month dividend comes in at 8.5% - 9% annualized yield. This will be coming down quite soon (dividend drop most likely) since Prime is 5.50% down from 9.5% a year ago. I am expecting the dividend to drop to about 3.2cents for PPR as the interest rates on their loans get marked down. Once the dividend gets to that level, it seems logical to expect that the discount to NAV will disappear and a slight premium will develop as investors begin to anticipate increases in dividend. Unlike your ACG, the size of the monthly check from PPR/VVR varies quite a bit. Dividend is now 0.047 for PPR, expected to go to 0.032, and down from the peak of 0.073 in the last year. Robert