Investing Santa: Giving away a half-dozen closed-end funds below NAV

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Theodor Tonca – Chairman & CEO at Graham Theodor & Co. Ltd.

They say tis’ the season for giving right? Well, let me do my part in the best way i know how…by giving some investment bargains to one and all, young and old alike.

Whenever anyone asks: “If you could go back and change one thing from when you first started investing, what would it be?” I always reply by saying that i would have purchased more closed-end funds below their net asset value or similar ‘low-hanging fruit’. Here is an attempt to right some of my wrongs:

– Zweig Fund (NYSE: ZF): NAV: $14.75 per share. Market price: $13.30 per share (10.8% discount as of 12.23.15). 0.80% annual dividend yield.

– Royce Micro-Cap Trust (NYSE: RMT): Owns $319.2 Mil. USD of net assets ($8.46 per share) Market value: $309.2 Mil. USD ($7.22 per share) 17.1% discount. 10.30% annual div. yield.

– Gabelli Dividend & Income Trust (NYSE: GDV): NAV: $20.49 per share. Market price: $18.44 per share. 11.1% discount. 1.70% annual div. yield payable monthly.

– Adams Diversified Equity Fund, formerly the Adams Express Co. (NYSE: ADX): Market price: $12.85 per share. NAV: $14.77 per share. 15% discount. 1.74% annual div. yield.

– Nuveen Total Return Strategy Fund (NYSE: JTA): Market price: $11.72 per share. NAV: $12.81 per share. 9.3% discount. 9.60% annual div. yield.

– Central Securities Corp (NYSE: CET): NAV: $23.40. Market price: $19.24 per share. Approx. 21.6% discount. 10% annual dividend yield

Median discount to NAV: 12.35%. Median Div. Yield: 5.69%

From this date, over a long (or sometimes short) term,  empirical evidence suggests that either the market as a collective of individuals will realize the fund is under-priced and drive the share price up, or the closed-end fund managers will themselves look to obtain shareholder approval to buy back shares and remove the discount.


Disclaimer: Author or author’s company currently owns minority stakes in substantially all of the securities mentioned above. All information contained herein is “as is” and the author expressly disclaims making any express or implied warranties with respect to the fitness of the information contained herein for any particular usage, application or purpose.


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