Sunday, April 17, 2011

Updated CEF Portfolio

I periodically post my CEF portfolio.  The following table is updated to reflect positions as of 4/15/2011.  I will discuss some additions and deletions, which are reflected in this table, in upcoming posts.  The primary deletion was the sale of 500 shares of FAX, a bond CEF. I added shares to the balanced CEF CSQ and initiated new positions in the buy-write stock CEFs ETV and EXG.   I had not previously included my reinvested shares in CSQ, having only recently changed my distribution option from cash to reinvestment. One consideration in making the choice between taking the dividend in cash or reinvesting to buy additional shares is the size of the discount to net asset value.

While I do not follow any iron clad rules, flexibility being a key character trait for any investor, I will not reinvest dividends when the discount to net asset value is less than 5% and will certainly refrain from doing so when the CEF is selling at a premium to its net asset value.  I prefer to reinvest when the discount exceeds 10%.  For some CEFs, like GDO, I own shares in two accounts, and I am reinvesting the dividend to buy shares only in one of those accounts.   Currently, I am reinvesting the dividends only in the following CEFs: ADX, BHK, BTZ (only 1/2), CSQ, GDO (only in taxable account), JQC, RMT, RVT, SGL, and SWZ.  I recently quit reinvesting the dividend in IGR, and I started taking dividends in cash on EOI, ETW, JSN, and PSY, though I may start back reinvesting the dividend for PSY given its current discount to net asset value.

When I posted this table on Saturday, I had not yet added the 200 shares of IMF that I bought last week, so I corrected that omission with a new table on Sunday. 

The CEF mini-portfolio is intended to be a balanced world portfolio, with a focus on current income generation.   

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