CEFL January Dividend Gives Yield Of 23%

The UBS ETRACS Monthly Pay 2x Leveraged Closed-End Fund ETN (NYSEARCA: CEFL) and YieldShares High Income ETF (NYSEARCA: YYY), which is based on the same index and thus has the same components as CEFL, but without the 2X leverage, will soon declare monthly dividends for January 2015. There are 30 closed-end funds that comprise the ISE High Income Index upon which CEFL and YYY is based. As is shown in the table below, of those 30, there are 4 that pay dividends quarterly, while the other 26 pay dividends monthly. One of the 4 quarterly payers went ex-dividend in November 2014, Nuveen Diversified Currency Opportunities Fund (JGT). Thus, it will not be included in the January 2014 CEFL monthly dividend calculation. The other three quarterly payers all have ex-dividends in the month of December 2014. Thus, they will be included in the January 2014 CEFL dividends.Because of the three quarterly payers there is still some "small month" - "big month" effects . The components: Gabelli Equity Trust (NYSE: GAB), AllianzGI NFJ Dividend Interest & Premium Strategy Fund (NYSE: NFJ) and Nuveen Equity Premium Opportunity Fund (JSN) still pay quarterly dividends in January, April, October and July. Those three comprise 10.56% of the index. However, the small month - big month effect is more pronounced than just 10.55% since in the big months they pay amounts equal to 3 months of dividends.My projection is that the January 2015 CEFL dividend will be $0.5574. YYY is a fund, not an... Read more