Why Aren't These Closed-End Funds Getting More Love? Part 1: Aberdeen Total Dynamic Dividend Fund

Published Wed, 03 Oct 2018 10:12:53 -0400 on Seeking Alpha

As long-time members will know, one of the more useful services provided by CEF/ETF Income Laboratory is to warn when a closed-end fund [CEF] becomes overvalued on the basis of absolute and relative valuation metrics, allowing members to (1) lock in juicy profits arising from premium/discount valuation changes alone, (2) sidestep potentially major capital losses if, or when, the premium/discount valuation reverts, and (3) rotate into a more undervalued CEF in the same sector in order to "compound income on steroids." In many cases, funds appear to become overvalued for no rhyme or reason at all...
In this article, I'd like to do a reverse type of analysis: spotlight three CEFs that we think deserve more love from investors!
Aberdeen Total Dynamic Dividend Fund The first unloved fund is the Aberdeen Total Dynamic Dividend Fund (AOD) (formerly the Alpine Total Dynamic Dividend Fund), a $1067 million global equity CEF. It was incepted on January 26, 2007.
Here's the data for the peer group under consideration. AOD belongs to CEFConnect's "Global Equity Dividend" category, but since there are only 5 funds in that category, I decided to widen the comparison by also including the "Global Equity" and "Global Growth & Income" categories.

AOD currently trades with a discount of -11.90%, a 1-year z-score of -1.6 and a yield of 7.89% that is 116% covered. It charges a baseline expense of 1.15% and is 9% levered.
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