After the changes cited in the most recent posts, as of January 22, the portfolio now consists of thirteen common stocks and five closed-end funds. The current portfolio yield is 6.7%. Here are the holdings with the January 22 closing prices, as well as the percentage of the portfolio comprised by each holding:
Genuine Parts Company (GPC), $66.06, 3.7%
Johnson & Johnson (JNJ), $72.69, 5.5%
National Retail Properties Inc (NNN), $32.50, 4.9%
W.P. Carey Inc. (WPC), $54.13, 5.1%
Southern Company (SO), $43.85, 5.0%
NuSTAR Energy L.P. (NS), $51.57, 7.1%
Natural Resource Partners L.P. (NRP), $22.18, 7.5%
Starwood Property Trust Inc. (STWD), $24.05, 5.0%
Eaton Corp. PLC (ETN), $56.98, 5.4%
LinnCo LLC (LNCO), $39.18, 5.6%
LTC Properties Inc (LTC), $36.91, 4.9%
PPL Corp. (PPL), $29.60, 5.0%
Annaly Capital Management Inc (NLY), $14.87, 5.0%
BlackRock Utility & Infrastructure Fund (BUI), $18.93, 5.0%
NFJ Dividend & Premium Strategy Fund (NFJ), $16.43, 4.9%
Eaton VAnce Tax-Managed Buy-Write Opportunities Fund (ETV), $12.93, 4.9%
Nuveen Equity Premium Advantage Fund (JLA), $12.48, 4.9%
ING Global Advantage & Premium Opportunity Fund (IGA), $12.00, 5.0%.
Cash 5.7%
Tuesday, January 22, 2013
ING Global Advantage & Premium Opportunity Fund
The ING Global Advantage & Premium Opportunity Fund (IGA), according to the fund's website, invests in 750 to 1,500 common stocks, seeking through diversification to reduce exposure to individual stock risk. IGA seeks a target holding of 60% in U.S. stocks and 40% in international stocks.
IGA sells, or writes, call options on selected security indices and/or ETFs, on an amount equal to approximately 60-100% of the value of the fund's common stock holdings. The fund also hedges major currency exposure to reduce volatility of returns.
As of January 18, 2013, IGA's market price was $12.05. The net asset value was $12.79, for a discount of 5.79%. The current quarterly dividend is $.28. At the close of trading on January 22, the market price was $12.00, for a yield of 9.33%.
According to Morningstar, the annual expense ratio is 1.0%. The fund does not use leverage.
The top common stock holdings as of 9/30/2012 were: Apple Inc (2.72%), Exxon Mobil Corporation (1.83%), Microsoft Corporation (1.24%), and Pfizer Inc (1.05%).
Shares of IGA were purchased for the portfolio in January, 2013. It comprises 5.0% of the portfolio. It was chosen because of its international exposure and the use of writing call options to enhance income.
IGA sells, or writes, call options on selected security indices and/or ETFs, on an amount equal to approximately 60-100% of the value of the fund's common stock holdings. The fund also hedges major currency exposure to reduce volatility of returns.
As of January 18, 2013, IGA's market price was $12.05. The net asset value was $12.79, for a discount of 5.79%. The current quarterly dividend is $.28. At the close of trading on January 22, the market price was $12.00, for a yield of 9.33%.
According to Morningstar, the annual expense ratio is 1.0%. The fund does not use leverage.
The top common stock holdings as of 9/30/2012 were: Apple Inc (2.72%), Exxon Mobil Corporation (1.83%), Microsoft Corporation (1.24%), and Pfizer Inc (1.05%).
Shares of IGA were purchased for the portfolio in January, 2013. It comprises 5.0% of the portfolio. It was chosen because of its international exposure and the use of writing call options to enhance income.
Eaton-Vance Tax-Managed Buy-Write Opportunities Fund
The Eaton Vance Tax-Managed Buy-Write Opportunities Fund (ETV), according to the fund's website, invests in a diversified portfolio of common stocks and writes call options on one or more U.S. indices on a substantial portion of the value of its common stock portfolio. The purpose of writing (or selling) call options is to generate current earnings from option premiums received. The fund evaluates returns on an after tax basis and seeks to minimize and defer federal income taxes incurred by shareholders in connection with their investment in the fund.
Specifically, ETV writes call options on the S&P 500 Index and the NASDAQ 100 Index. As of 9/30/2012, the fund's largest holdings were Apple (11.2%), Microsoft Corporation (4.9%), Google (4.1%), Oracle (2.9%), Intel (2.5%), and QUALCOMM Inc (2.3%).
Shares of ETV were purchased in January. It comprises 4.9% of the portfolio. This fund was chosen for inclusion in the portfolio for several reasons. NASDAQ stocks are well represented in the fund. Technology stocks are prominent among the fund's top holdings. My portfolio does not include any individual tech stocks, so this is a way to get some exposure to that sector.
This fund has been featured in several Seeking Alpha articles by Douglas Albo. Eaton Vance is changing the distribution for its funds from quarterly to monthly. In August, 2012, Eaton Vance announced a 10% repurchase of all its funds.
As of January 18, 2013, the net asset value of ETV was $14.20. The market price was $12.96, for a discount of 8.73%.
Quarterly distributions have been steady at $.3323 per share. The closing price for ETV on January 22, 2013 was $12.93, for a yield at market price of 10.28%.
According to Morningstar, the annual expense ratio for ETV is 1.09%.
ETV is one of five closed-end funds in the portfolio that write call options to generate a higher yield. None of the CEFs in the portfolio uses debt or leverage to enhance yield.
This is not a recommendation to buy ETV. Do your own homework. Everyone's situation is different.
Specifically, ETV writes call options on the S&P 500 Index and the NASDAQ 100 Index. As of 9/30/2012, the fund's largest holdings were Apple (11.2%), Microsoft Corporation (4.9%), Google (4.1%), Oracle (2.9%), Intel (2.5%), and QUALCOMM Inc (2.3%).
Shares of ETV were purchased in January. It comprises 4.9% of the portfolio. This fund was chosen for inclusion in the portfolio for several reasons. NASDAQ stocks are well represented in the fund. Technology stocks are prominent among the fund's top holdings. My portfolio does not include any individual tech stocks, so this is a way to get some exposure to that sector.
This fund has been featured in several Seeking Alpha articles by Douglas Albo. Eaton Vance is changing the distribution for its funds from quarterly to monthly. In August, 2012, Eaton Vance announced a 10% repurchase of all its funds.
As of January 18, 2013, the net asset value of ETV was $14.20. The market price was $12.96, for a discount of 8.73%.
Quarterly distributions have been steady at $.3323 per share. The closing price for ETV on January 22, 2013 was $12.93, for a yield at market price of 10.28%.
According to Morningstar, the annual expense ratio for ETV is 1.09%.
ETV is one of five closed-end funds in the portfolio that write call options to generate a higher yield. None of the CEFs in the portfolio uses debt or leverage to enhance yield.
This is not a recommendation to buy ETV. Do your own homework. Everyone's situation is different.
NFJ Dividend Interest & Premium Strategy Fund
The NFJ Dividend & Premium Strategy Fund (NFJ) is managed by Allianz Global Investors. According to their website, the 1,000 largest stocks are screened for low price/earnings (P/E) ratios, high dividend yields and visible earnings. NFJ applies a quantitative grid that measures price momentum, earnings revisions, fundamental change, and insider trading. In-depth fundamental research is done on the remaining 250-300 companies, focusing on earnings, cash flow generation, and product potential. From this list, the fund managers construct a portfolio of 40-50 companies. They regularly monitor buy and sell candidates. They sell a stock when an alternative stock with equally strong fundamentals demonstrates a substantially lower price/earnings ratio and/or a substantially higher dividend yield.
NFJ utilizes both broad index options and narrower based sector index options with the objective of optimizing the correlation between the NFJ stock portfolio's sector allocation and the option strategy's exposure. Their holdings may include convertible securities. NFJ does not use leverage.
The fund's top holdings as of 12/31/2012 were: Pfizer (3.54%), GlaxoSmithKline (3.08%), Total SA (3.05%), ConocoPhillips (2.96%), and AstraZeneca PLC (2.89%).
NFJ's market price at the close on January 22 was $16.43. As of January 18, the market price was $16.53 and the net asset value (NAV) was $17.72, for a discount of 6.71%. The quarterly distribution is $.45 per share, for a 10.955% yield at the $16.43 January 22 market price.
As of 12/31/2012, assets were $1.631 billion. The fund assets included 73.77% common stocks and 26.59% convertible securities.
This closed-end fund (CEF) was added to the portfolio in January, 2013. It comprises 5.0% of the portfolio.
Morningstar reports that the annual expense ratio for NFJ is .97%.
This is not a recommendation to buy NFJ. Each person's situation is different. Do your own research.
NFJ utilizes both broad index options and narrower based sector index options with the objective of optimizing the correlation between the NFJ stock portfolio's sector allocation and the option strategy's exposure. Their holdings may include convertible securities. NFJ does not use leverage.
The fund's top holdings as of 12/31/2012 were: Pfizer (3.54%), GlaxoSmithKline (3.08%), Total SA (3.05%), ConocoPhillips (2.96%), and AstraZeneca PLC (2.89%).
NFJ's market price at the close on January 22 was $16.43. As of January 18, the market price was $16.53 and the net asset value (NAV) was $17.72, for a discount of 6.71%. The quarterly distribution is $.45 per share, for a 10.955% yield at the $16.43 January 22 market price.
As of 12/31/2012, assets were $1.631 billion. The fund assets included 73.77% common stocks and 26.59% convertible securities.
This closed-end fund (CEF) was added to the portfolio in January, 2013. It comprises 5.0% of the portfolio.
Morningstar reports that the annual expense ratio for NFJ is .97%.
This is not a recommendation to buy NFJ. Each person's situation is different. Do your own research.
BlackRock Utility & Infrastructure Trust
BlackRock Utility and Infrastructure Trust (BUI) was added to the portfolio in January, 2013. This is a closed-end fund (CEF) that writes call options on the securities in the trust's portfolio. It does not use leverage, or debt.
At the end of the third quarter, 2012, BUI holdings included 29.3% electric utilities, 19.2% multi-utilities, 13.6% diversified telecommunication services, 11.0% water utilities and 8.2% oil, gas and consumable fuels.
This is from the BUI website: "The Trust considers the 'Utilities' business segment to include products, technologies and services connected to the management, ownership, operation, construction, development or financing of facilities used to generate, transmit or distribute electricity, water, natural resources or telecommunications and the 'infrastructure' business segment to include companies that own or operate infrastructure assets or that are involved in the development, construction, distribution or financing of infrastructure assets."
BUI now represents 4.9% of the portfolio. Together with two individual stocks, Southern Company (SO) and PPL Corp (PPL), the utility sector comprises 14.9% of the portfolio, just under the 15% target.
The BUI market price at this writing (near the close on January 22) was $18.92. The quarterly dividend is $.3625. The yield at this price is 7.66%. According to Morningstar, the net annual expense ratio reported for 2012 was 1.12%, and as of January 18, 2013, BUI's market price of $18.63 was a 7.73% discount to its net asset value (NAV) of $20.19.
This investment was made as a way of diversifying the utility segment of the portfolio and as a way of capturing a higher yield through the sale of call options.
Everyone's situation is different. This is not a recommendation to buy BUI, but a recommendation for a closed-end fund to study. Do your own due diligence.
At the end of the third quarter, 2012, BUI holdings included 29.3% electric utilities, 19.2% multi-utilities, 13.6% diversified telecommunication services, 11.0% water utilities and 8.2% oil, gas and consumable fuels.
This is from the BUI website: "The Trust considers the 'Utilities' business segment to include products, technologies and services connected to the management, ownership, operation, construction, development or financing of facilities used to generate, transmit or distribute electricity, water, natural resources or telecommunications and the 'infrastructure' business segment to include companies that own or operate infrastructure assets or that are involved in the development, construction, distribution or financing of infrastructure assets."
BUI now represents 4.9% of the portfolio. Together with two individual stocks, Southern Company (SO) and PPL Corp (PPL), the utility sector comprises 14.9% of the portfolio, just under the 15% target.
The BUI market price at this writing (near the close on January 22) was $18.92. The quarterly dividend is $.3625. The yield at this price is 7.66%. According to Morningstar, the net annual expense ratio reported for 2012 was 1.12%, and as of January 18, 2013, BUI's market price of $18.63 was a 7.73% discount to its net asset value (NAV) of $20.19.
This investment was made as a way of diversifying the utility segment of the portfolio and as a way of capturing a higher yield through the sale of call options.
Everyone's situation is different. This is not a recommendation to buy BUI, but a recommendation for a closed-end fund to study. Do your own due diligence.
Universal Health Realty Trust
Universal Health Realty Trust (UHT) has been in the portfolio since February, 2008. The cost basis was $37.61. The yield at the time of the initial purchase was 6.7%. Of several subsequent purchases, the highest yield was 7.6% at the time of that purchase.
UHT is, I believe, a soundly managed REIT. The company has increased the dividend at least annually since 1987. Since the time of my last purchase in August, 2012, UHT has seen strong price appreciation. This month I closed out the portfolio's position in UHT.
At this writing (January 22), prior to the close, the market price is $53.46.
The most recent quarterly dividend, paid December 31, 2012, was 62 cents per share. At the current market price of $53.46, the yield is over 4.6%. One of the difficult decisions in investing is knowing when to sell a stock. The decision to sell UHT was not easy. The sale is not a reflection of the company's operation, which continues to move along steadily.
The sale was part of a larger diversification. The portfolio's heaviest weighting is in REITs and it included two healthcare REITs, UHT and LTC Properties Inc (LTC). At year-end 2012, UHT represented 7.3% of the portfolio.
I would not hesitate to own UHT again. This is certainly not a recommendation to sell (or buy) UHT. As always, do your own homework. Everyone's situation is different.
UHT is, I believe, a soundly managed REIT. The company has increased the dividend at least annually since 1987. Since the time of my last purchase in August, 2012, UHT has seen strong price appreciation. This month I closed out the portfolio's position in UHT.
At this writing (January 22), prior to the close, the market price is $53.46.
The most recent quarterly dividend, paid December 31, 2012, was 62 cents per share. At the current market price of $53.46, the yield is over 4.6%. One of the difficult decisions in investing is knowing when to sell a stock. The decision to sell UHT was not easy. The sale is not a reflection of the company's operation, which continues to move along steadily.
The sale was part of a larger diversification. The portfolio's heaviest weighting is in REITs and it included two healthcare REITs, UHT and LTC Properties Inc (LTC). At year-end 2012, UHT represented 7.3% of the portfolio.
I would not hesitate to own UHT again. This is certainly not a recommendation to sell (or buy) UHT. As always, do your own homework. Everyone's situation is different.
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