|
|
Post by xray on Jan 30, 2021 14:47:34 GMT
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jan 30, 2021 20:06:34 GMT
Thanks xray for the link. GLO and GLQ have expense ratio of around 3.4%. That is rather high. Is it not?
|
|
|
|
Post by xray on Jan 31, 2021 17:35:09 GMT
You may find this amusing. I "never" look at any expense ratio's. If/when I am getting what I want out of a security [to my goals and objectives], I always want to reward the manager of the CEF or security in question for his performance. I never use ROC [which doesn't mean anything until 12/31] or expense ration in any of my parameter analysis....
Markets and sectors can change and we must be vigilant to the changes. GLO and GLQ got hit pretty good this week in both NAV's [$0.63 & $0.81 respectively] and Mktprc. However, always however's, their distribution [11.14% and 11.04% respectively COB Friday] is "FIXED" until the end of the year so it doesn't have a effect on current shareholders. Looking at my "sell codes", GLO has a "1" and GLQ has a "3" indicating a current "HOLD". The best market price entry point [0-2% of portfolio in a initial buy] is currently shown to be 11.45 and 14.22 respectively....
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jan 31, 2021 17:48:03 GMT
in general, I doubt there is any money manager out there with enough expertise to deserve that much fees.
But i agree with you, focus should be on are we getting what we want after the fees rather than what the other party is getting. We need to go for win win.
|
|
|
|
Post by xray on Jan 31, 2021 17:51:09 GMT
In our current case, GLO and GLQ fee's are too low. They raised their distributions by >20% [on both GLO/GLQ] and some of us already have >7k in CapGains....
|
|
|
|
Post by bb2 on Jan 31, 2021 20:40:21 GMT
This is a pretty good blurb on CEF's. moneyfortherestofus.com/closed-end-funds/ (But still very basic. Go to the annual reports.) What this article doesn't cover is that these are not income investments but total return, despite the high distributions. Clough funds explicitly say they're TR vehicles. I'm starting to get it. I still don't understand exactly how the leverage works to juice the distributions, considering the OBFR is .07% annualized. (Edit: This is for bond CEF's.) GLO's, Q's and V's largest performance contributor was investments in Eurodollar futures. (Betting on rates.) That's out of my league and so, for me, holding these Clough funds is a leap of faith in the management team. Nothing wrong with that but not quite my style. Maybe for a small chunk. Kind of a cross your fingers thing. Other contributors were well performing stocks, PennyMac, Amazon, Teledoc, Crispr. Actually, these people do seem to know what they're doing. The shareholder letter, annual report is good reading. Looks like they will stick to health, tech and housing in the US and China for 2021. I'll be reading Pimco's annual next. (Golf course is closed tomorrow.) I don't know why I didn't land on the annuals sooner. Returns over the last 1-10 years need to be viewed in the context of the bull we've all been riding. |
|
|
|
Post by xray on Aug 7, 2021 10:55:15 GMT
Article from SmartAsset:
----------
SmartAsset
Distribution vs. Dividend: Key Differences
Ashley Kilroy
Thu, August 5, 2021, 11:35 AM
Investors not only seek capital appreciation from the securities they buy, but they sometimes also pick securities for the income they provide. Such income can come in the form of dividends and distributions. Some may think that dividends and distributions are interchangeable terms for these payouts, but they are very different. Understanding where these two forms of income differ can help investors navigate future investment options. Here are some of the main differences between dividends and distributions. A financial advisor can provide valuable insight into which type of fixed-income investments are the best fit for your goals, timeline and risk profile.
What Is a Dividend?
Purchasing a share of a stock makes you the partial owner of a corporation. When that happens, you can earn a payment from the company’s profits, known as a dividend. Generally, dividends are the most typical form of cash payment made by C corporations, typically large businesses whose shares trade on major stock exchanges, such as the New York Stock Exchange and the NASDAQ.
Companies may not always choose to pay out dividends. Instead, they can decide to hold on to the money and put it towards something within the company. That way, it has the opportunity to fund internal growth or future operations.
There are also different forms of dividends. Cash dividends are usually the most popular type, but there are also stock dividends, property dividends, scrip dividends and liquidating dividends.
The IRS views dividends as separate from the actual share of the company. Instead, the IRS treats it as a portion of the company’s profits. So, dividends don’t factor into the stock’s original cost.
What Is a Distribution?
Unlike a dividend, a distribution is a cash disbursement from a mutual fund or small business that is organized as an S corporation. In the U.S. such corporations can have no more than 100 owners or shareholders, all of whom are U.S. residents. Plus, they can only have a single class of shareholder.
S corporations, which are a type of pass-through entity, forward their income, deductions, losses and credits directly through to their shareholders. Those who hold these shares then report the flow-through of income and losses on their own tax returns, where they are assessed at the individual shareholder’s rate. The IRS treats distributions as a payout of company equity and thus are used to calculate the cost basis of an investment.
Distribution vs Dividend: Taxation
Payouts from S Corporations and C corporations are taxed differently.
Dividends from C corporations, which file Form 1120 tax returns, are taxed twice. Firstly, the company’s profits are taxed. Secondly, the disbursement of these profits as dividends is made with after-tax money and shareholders who receive these dividends must pay taxes on the dividends they have received. This is known as double taxation.
Sometimes dividends may become eligible as qualified dividends. In this case, they are up for taxation at a lower capital gains rate. Capital gain dividends also break into two categories: long and short term. Long-term capital gains operate under standard capital gain tax rates. In contrast, short-term capital gains are included under ordinary income.
Generally, S corporations, which file Form 1120-S tax returns (or another form identified with closely held businesses), don’t pay any income taxes. Instead, taxation occurs on the shareholders’ level. So, if you own shares of an S corporation, then you are taxed on your allocated share of the profits from the business, i.e., your distribution.
The particulars of the taxation for the shareholder that receives a distribution depend on the nature of that income. If it’s standard income, then you pay standard income tax rates as part of your individual tax liability. You report this type of income via Form 1040. However, if the distribution is considered capital gains (or dividends accumulated when an S corporations was a C corporation) then the shareholder pays at a lower tax rate.
Distribution vs Dividend: What Is a Yield?
The term “yield” typically refers to the income an investment earns. This is usually expressed as a percentage. Dividend yields are percentages calculated when you divide the overall yearly dividend payments that a shareholder earns by the stock’s current share price. In general, a good dividend yield sits around 2% to 6%, but various factors can sway that number higher or lower. Moreover, those numerous influences can also make it complicated to decide what qualifies as a good dividend yield.
Similarly, a distribution yield also measures the cash payout for a shareholder. For a distribution yield, you annualize the most recent distribution and divide that by the net asset value (NAV) of the investment at the moment of payment.
There are a number of investors who purchase stocks from certain companies regardless of increases in their stock price. They are more interested in the companies’ reliable dividend payout and the history of yearly increases that comes with it. These corporations are called Dividend Aristocrats, and they earn a spot on the S&P 500 index for paying and increasing their base dividend annually for a minimum of 25 consecutive years.
By calculating the yields on these Dividend Aristocrats or any valuable investments for distributions, investors can decide which shares are worth purchasing.
The Bottom Line
A dividend is a payment from a C corporation, usually in the form of cash or additional shares. A distribution, on the other hand, is a payment from a mutual fund or S corporation, always in the form of cash. Dividends are paid with after-tax money – thus they are double taxed; distributions are paid with before-tax money – thus they avoid being double taxed. The IRS treats distributions as a payout of company equity.
Tips on Investing
If you’re interested in adding dividend income to your investment strategy, you may not know where to start. A financial advisor is one answer to such a dilemma. SmartAsset offers a free matching tool that can help you get in contact with up to three local advisors in only minutes. Once you find the one best suited for your needs and situation, they can help walk you through the process. If you’re ready, get started now.
While your main goal may be to find the investment with the strongest dividend yield or distribution yield, it’s important to keep in mind the risk level of every investment. Prioritize your pre-established risk tolerance before looking for specific returns. If you want greater returns or more income, consider reevaluating your portfolio, its strategies and goals first.
The post Distribution vs. Dividend: Key Differences appeared first on SmartAsset Blog.
----------
Live Long and Prosper....
|
|
|
|
Post by yogibearbull on Aug 7, 2021 12:07:40 GMT
|
|
