Which Dividend Harvest CEFs Have a Real Return of Capital?

Sometimes it takes a swift kick in the pants to remind investors the price they are paying for an investment. Take for example two popular Closed-End funds (CEFs) from the Alpine family of funds, the Global Dynamic Dividend fund (AGD) and the Total Dynamic Dividend fund (AOD). Both of these funds are known as dividend harvest or dividend capture funds and if you go to Alpine’s website you will read all about their strategies to scan the globe looking for dividend and growth opportunities. Essentially, these funds attempt to harvest multiple dividend periods by overweighting dividend yielding global stocks ahead of their ex-dividend dates and then rotating assets to overweight other or alternating dividend yielding global stocks ahead of their ex-dividend dates. The end result is a treasure chest full of investment income for the fund that can be distributed as tax-qualified dividends. But is this fool’s gold? The table below will show the total Net Asset Value (NAV) returns (including dividends and capital gains) for the funds since inception. I have included the total returns of two other global CEFs, the Eaton Vance Tax-Managed Diversified Equity Income fund (ETY) and the Eaton Vance Tax-Managed Global Diversified Equity Income fund (EXG) as comparisons. ETY and EXG are good performance comparables to AGD and AOD because they came public around the same time at $20 per share (minus a sales credit gives inception NAV price), and have global equity portfolios and similar inception dividends and yields.... Read more