Boosting Your Portfolio With Preferred ETFs

Should you be putting your money into stocks or bonds? How about investing in a hybrid that contains the best of common stocks and the best of corporate bonds? This financial crossbreed exists in the form of preferred stock. What some investors call an evolution, others may call a mutation by claiming that preferred stocks combine the worst of common stocks and the worst of corporate bonds.

The Best Of:

• With preferred stocks you will typically receive a consistent dividend, as you would with bonds, but they are taxed like common stock dividends.
• Preferred stocks will give you a higher price appreciation than bonds if the common stock increases but the price will not increase at the same rate as the common stock.
• The dividend yield on preferred stocks is usually higher than the yield on the corporate bonds.
• Preferred stocks have the first right to dividends; Preferred shareholders will be paid before any dividends are paid out to the holders of the common stock.

The Worst Of:

• Preferred shareholders do not have any voting rights.
• In the case of a default, bond investors have the priority in claims on assets.
• Preferred stocks can depreciate in value, just like the common stock, although they will usually retain their value better than common stocks.
• Rising interest rates will have a negative impact on preferred stocks.

One way to get involved with preferred stocks is through ETFs. Two preferred stock ETFs that I follow are the iShares S&P US Preferred Stock Index Fund (PFF) and the PowerShares Preferred Portfolio ETF (PGX). These two ETFs are tied directly to the financial sector as the top 10 holdings between the two ETFs include most of that sector’s major players: Barclays PLC (BCS), JP Morgan Chase & CO (JPM), HSBC Holdings (HBC), Wells Fargo & Company (WFC), Morgan Stanley (MS), and Bank of America (BAC).
You may be wondering why you would want to have anything to do with stocks (common or preferred) in the financial sector instead of simply buying a diversified bond fund for the yield. After all, much of the decline in the financial sector since April ’10 has been due to unfavorable economic data as well as uncertainty with how the banks will cope with the financial reform regulation, the Dodd-Frank bill. Specifically within the Dodd-Frank bill is the Durbin Amendment which Bank of America CEO, Brian Moynihan, states:

The most recent, the Durbin Amendment in the interchange area, this is going to cause a significant reduction in revenue in the future and a carrying value change in our asset in the credit card business...

Caution in this area is warranted but no matter what your thoughts are about the financial sector it appears that, in many circumstances, preferred stock ETFs can outperform both common stocks and corporate bonds.

Round 1: Preferred ETFs vs. a Morningstar Analyst’s Recommended Bond Fund

I took a look at the Morningstar Analyst Research application on SeekingAlpha.com. This handy application allows you to pull up analyst research reports on over 2,000 stocks and ETFs. I pulled up the report for PFF and found that the analyst didn't seem to be a big fan of preferred stocks. The report wasn't negative, I’d say it was neutral, but the analyst recommended the Barclays Capital Long Term Bond ETF (LWC) which I put to the test.

I looked at the prices for all three ETFs around the March 2009 stock market lows through 1/14/11. LWC’s inception date was 3/10/2009 which is why that date was chosen as the starting point for this test. The results clearly favor the preferred stock ETFs:

ETF	Date	Price	% Gain
PFF	3/10/2009	$15.89
	8/27/2010	$38.98	145%
PGX	3/10/2009	$6.65
	8/27/2010	$14.08	111%
LWC	3/10/2009	$30.78
	8/27/2010	$35.39	14.9%

The key difference between a preferred stock and a corporate bond is the possibility of a higher price appreciation in an advancing stock market. The preferred stock ETFs also boast a higher dividend yield. PFF currently yields 6.92%, PGX yields 7.23%, and LWC is yielding 5.56%.

Round 2: Preferred ETFs vs. Financial Common Stocks


Preferred stocks are not going to outperform their common counterpart when the common stock has a large upward price movement, but which one has the better performance in a market that is trending lower? I took a look at three major banks, Bank of America (BAC), JP Morgan & Chase CO (JPM), and Wells Fargo & Company (WFC), compared to the preferred stock ETFs. The financial sector hit its most recent high around the middle of April ’10 and was on the decline through the latter part of 2010. I pulled these results from the opening price on 4/15/10 to the closing price on 8/27/10:

Stock/ETF	Date	Price	Gain/Loss
BAC	4/15/2010	$19.48
	8/27/2010	$12.64	(35.1%)
JPM	4/15/2010	$47.81
	8/27/2010	$36.60	(23.4%)
WFC	4/15/2010	$33.51
	8/27/2010	$24.00	(28.4%)
PFF	4/15/2010	$38.89
	8/27/2010	$39.95	2.7%
PGX	4/15/2010	$13.87
	8/27/2010	$14.36	3.5%

The Result

The examples show that the preferred stock ETFs can outperform both common stocks and corporate bonds. The key to using preferred stocks lies in defining your thoughts about the market’s direction as well as understanding the limitations of all the financial products. The fact that preferred stocks have a low correlation to both common stocks and corporate bonds qualifies them as excellent diversification instruments.

In a modestly bullish or neutral market, preferred stocks have a good chance of outperforming bonds; Preferred stocks may also outperform their common stock counterparts due to their higher dividend yields. In an aggressive bull market, the preferred stocks will most likely underperform common stock but outperform bonds. In a bear market, preferred stocks can outperform common stocks and provide some safety due to their high yields. During this type of market, bonds may outperform preferred stocks as investors shift from the equity market into the relative safety of the bond market.
Note: The results shown in the examples represent only the price changes without accounting for any dividends.


Disclosure: I am long PFF, PGX, along with 2 or 3 closed end funds of preferred shares.

Four ROOKIE Investor ETF Investing Mistakes

Investors are at last beginning to return to the equity markets, and ETFs are slated to play a bigger role than ever before. Wary of mutual fund managers and conscious of tax implications, many sidelined investors will be drawn to ETF strategies that promise to mitigate security-specific risk while maximizing exposure to particular assets.

However, when it comes to structure, pricing and trading, these products are more complex than most investors initially realize. Whether you're a first-time ETF investor or just looking to use ETFs in a way you haven't tried before, here are four "rookie" mistakes that can be easily avoided.

1. Placing a Market Order in an Illiquid Fund

With more than 1,000 products in the exchange-traded product universe, some funds have drawn copious amounts of attention while others -- sometimes seemingly inexplicably -- fail to attract investor interest. These lightly traded funds can be particularly dangerous to new ETF investors because liquidity is important to the pricing of exchange traded funds. If an ETF is lightly traded, it can easily be thrown off track by an unexpectedly large order that causes market price to deviate from underlying value. No one wants to buy an ETF at a premium only to sell it at a discount when things go bad.


Nevertheless, there are times when somewhat-illiquid products offer compelling longer-term opportunities, and investors may want to get involved. The biggest mistake an ETF investor can make when placing an order in an illiquid ETF is to designate that trade as a "market order." Since market orders are concerned with immediate execution first (and price second), these are exactly the type of transactions that result in the most severe ETF pricing dislocations. If you need to place an order in an illiquid ETF, use a limit order at, or near, the last sale instead.

2. Using Leveraged Funds in the Wrong Situation

The most important aspect of leveraged fund construction is that the majority of "leveraged," "ultra" and "3x" ETFs are designed to track daily objectives. Whether the objective is to track the financial sector or the price of gold, these funds track their underlying indices for a single trading session only before "resetting" to do the same thing the next day. Whether you're using the Direxion Daily Financial Bear 3X Shares(FAZ_) or the ProShares UltraShort Real Estate ETF(SRS_), if you hold a leveraged fund over time, you will encounter compounding that skews longer-term results.

Leveraged ETFs are designed for sophisticated investors and are effective in certain trading strategies. After several regulatory inquiries and lawsuits, they are now plastered with warnings (but still are often misused). The best rule of thumb: If you don't understand how an ETF achieves its objective, pick a different product.

3. Missing the Forest Because of the Trees

Many investors try to maintain longer-term portfolios while simultaneously profiting from targeted short-term positions. While this is a great use of the variety and scope of the ETF products currently available, it's easy to forget to look below the surface and monitor how these different positions interact. ETF portfolios overlap, and investors who aren't careful about monitoring overall exposure can often develop unintended pockets of concentration in their portfolios. When two popular funds like the Vanguard MSCI Emerging Markets ETF(VWO_) and the iShares Emerging Markets ETF(EEM_) share so many of the same components, sometimes it's best to just stick with a single position.

4. Forgetting About the Clock

There are a number of factors that impact liquidity, both on an industry-wide and individual-fund basis. Investors making the transition from a portfolio that's heavy in mutual funds to one that is heavy in ETFs will often forget just how much volume, which ebbs and flows throughout the trading day, can impact execution.

Though the most liquid funds in the ETF universe (SPDR S&P 500 ETF(SPY_) and SPDR DJIA ETF(DIA_)) can change hands with ease throughout the trading day, other, less liquid ETFs are easier to trade at certain times during the trading day (without causing pricing dislocation).
Volume-wise, the two busiest times for ETF trading in a "normal" trading session (one that isn't shortened or impacted by the release of major economic data) generally occur between 9:30 a.m. EST and 11:30 a.m. EST and between 2:30 p.m. EST and 4:00 p.m. EST.

This information is important to know if you're looking to trade products actively without causing price dislocation. The best time to trade an ETF is when there are plenty of other investors interested in buying and selling the same fund. When you are looking to trade in an active manner (or trade a fund that isn't the biggest ETF on the block), make sure that time is on your side.

 Disclosure I am long SPY,DIA and VWO.

2011 stock picks: REIT ETF’s

So you have been building up a passive income portfolio and are at a point where you want to add more diversification to what you have? REIT’s would certainly be a great addition but they are often difficult to choose from without spending a lot of time and while some of us want to spend the time to choose the best ones, many others want an easier solution. Of course, that is where ETF’s come in.We wrote about REIT ETF’s briefly last year and received a lot of positive feedback because of the lack of information about the options.


REIT ETF’s are not new but they are certainly gaining steam and right now, Vanguard’s VNQ looks like a very solid winner. It has a very low 0.13% annual fee which is by far the best you will find in the sector and pays a very reasonable 3.42% dividend yield. And things are changing fast. Last year, VNQ was the category leader but had less than $5 billion in assets under management. These days, VNQ counts on over $15 billion and has distanced itself from rivals. It has investments in 104 US REIT’s although over 40% of those assets are invested into their top 10 holdings.

Real Estate Outlook

There remains some degree of risk involved in the real estate market as many investors continue to worry about a double dip in prices and REIT ETF’s are certainly not for everyone. If you do not have much assets besides your house, you might already have a big enough exposure to the real estate market (although you would admit that exposure is not very diversified) but as your portfolio grows, gaining more exposure is probably a good thing as it will make your passive income portfolio more solid, steady and reliable in the long term.

My first recommendation would be to take a look at the 20 things that I consider when selecting ETF’s, but if you want to cut straight to the case, I would consider the two main choices here to be VNQ and RWX (an internationally diversified real estate ETF), but here are most of the options that you have:

Disclosure I am Long VNQ, REM, and KBWY.

Ticker	Name	Market Cap	Price	Fees	1Y Return	Dividend Yield
VNQ	Vanguard REIT ETF	$7,487,048,000.00	$55.37	0.12	26.417	3.42
IYR	iShares Dow Jones US Real Estate Index Fund	$3,083,396,000.00	$55.96	0.47	24.275	3.52
RWR	SPDR Dow Jones REIT ETF	$1,368,794,000.00	$61.02	0.25	25.91	2.94
RWX	SPDR Dow Jones International Real Estate ETF	$1,437,894,000.00	$38.93	0.6	21.429	8.69
URE	ProShares Ultra Real Estate	$536,793,300.00	$50.62	0.95	42.814	0.77
SRS	ProShares UltraShort Real Estate	$241,879,900.00	$18.14	0.95	-49.889	0
IFGL	iShares FTSE EPRA/NAREIT Developed Real Estate ex-US Index Fund	$378,322,000.00	$31.01	0.48	15.533	6.24
DRN	Direxion Daily Real Estate Bull 3x Shares	$178,983,000.00	$56.82	0.96	55.568	1.88
RWO	SPDR Dow Jones Global Real Estate ETF	$163,108,000.00	$37.07	0.51	23.672	7.08
DRW	WisdomTree International Real Estate Fund	$118,814,500.00	$28.63	0.58	17.51	9.29
DRV	Direxion Daily Real Estate Bear 3x Shares	$55,288,740.00	$18.01	0.95	-70.396	0
FRI	First Trust S&P REIT Index Fund	$71,052,530.00	$14.65	0.5	25.456	2.04
REM	iShares FTSE NAREIT Mortgage Plus Capped Index Fund	$102,114,500.00	$15.59	0.48	16.817	9.1
TAO	Guggenheim China Real Estate ETF	$65,004,400.00	$19.94	0.65	11.714	0.77
REZ	iShares FTSE NAREIT Residential Plus Capped Index Fund	$70,902,000.00	$39.39	0.48	30.302	3.03
FTY	iShares FTSE NAREIT Real Estate 50 Index Fund	$50,580,000.00	$33.72	0.48	24.455	3.56
FFR	First Trust FTSE EPRA/NAREIT Developed Markets Real Estate Index Fund	$56,032,070.00	$35.02	0.6	18.518	3.87
IFAS	iShares FTSE EPRA/NAREIT Developed Asia Index Fund	$25,488,000.00	$31.86	0.48	17.218	5.99
PSR	PowerShares Active U.S. Real Estate Fund	$16,033,500.00	$45.81	0.8	25.703	2.11
RTL	iShares FTSE NAREIT Retail Capped Index Fund	$14,065,000.00	$28.13	0.48	35.17	2.91
FIO	iShares FTSE NAREIT Industrial/Office Capped Index Fund	$9,327,499.00	$26.65	0.48	13.856	3.22
IFEU	iShares FTSE EPRA/NAREIT Developed Europe Index Fund	$8,989,500.00	$29.97	0.48	8.649	4.09
IFNA	iShares FTSE EPRA/NAREIT North America Index Fund	$10,000,000.00	$40.00	0.48	23.943	2.73
REK	ProShares Short Real Estate	$19,945,040.00	$39.89	0.95	N/A	0
WREI	Wilshire US REIT ETF	$9,100,620.00	$30.34	0.32	N/A	0
VNQI	Vanguard Global ex-U.S. Real Estate ETF		$65,847,700.00	$50.60	0.35	N/A	0.88

Health Care ETFs Jump As Changes Kick In

As the calendar switched over into the new year, a slew of new health care rules went into effect. Health care exchange traded funds (ETFs) kicked off the year trading higher, but whether that sticks is another story.

Janet Adamy for The Wall Street Journal reports that new taxes on drug makers, lower prescription-drug costs for seniors and restrictions on tax-free medical spending accounts are among a slate of health-law provisions that kicked in alongside the new year.

The new rules may be felt differently across the health care industry, but one in particular could feel pain sooner rather than later. Pharmaceutical makers will get hit with a $2.5 billion tax, distributed across all drug makers and based on their sales volume for the year. That could cause some pain for ETFs like iShares Dow Jones U.S. Pharmaceutical (NYSEArca: IHE), which was up 11.1% in 2010.


This is all while the law faces a battle in the courts. A federal judge in Virginia ruled that a key provision of President Obama’s health care reform that requires most Americans to purchase health insurance is unconstitutional. Until this bill reaches the Supreme Court and goes any further, the health care sector could be volatile for some time, reports Benjamin Shepard for Investing Daily.

Health care ETFs such as iShares Dow Jones U.S. Healthcare Provider (NYSEArca: IHF), PowerShares Dynamic Pharmaceuticals (NYSEArca: PJP) and First Trust Health Care AlphaDEX (NYSEArca: FXH) are all up in the last year, some by more than others. If you want to own this sector, be aware of the risk for shocks as the legal issues work themselves out.

Disclosure I own none of these etfs

ETF Showdown: Timber Time

In the world of timber ETFs there are two. Yep, just two. Not even an ETN, which is strange considering there are timber futures trading here in the U.S., but we've got to focus on the options we do have access to and these two funds will be the focus of this week's ETF Showdown.
Like gold, coffee or oil, timber is a commodity and like so many other commodities, emerging markets demand is the driving force in the timber market. As ETFTrends recently pointed out, China is gobbling up pallets and packing materials, pulp and paper at rapid pace with no signs of a change in trend anytime soon.

Sounds like a good time to compare and contrast the Guggenheim Timber ETF (NYSE: CUT) and the iShares S&P Global Timber Index Fund (NYSE: WOOD). Kudos to both Guggenheim and iShares for coming up with appropriate tickers. Making distinctions between CUT and WOOD is critical for investors because over the past year, the performance of these ETFs is identical as both are up 30%.

First, we see that CUT trades for less than half the price of WOOD, allowing a trader to accumulate more than double the amount of shares for the same outlay of capital. So there's a point in CUT''s favor. CUT also features the better liquidity with an average daily trading volume for the past three months that is better than quadruple what WOOD features.

On the other hand, WOOD does offer the better expense ratio at 0.48% compared to 0.65% for CUT. Obviously both funds are going to have some of the same holdings, but the allocations are different because WOOD is nearly half allocated to the U.S. while about a quarter of CUT's allocation is devoted to the U.S. Either way, you'll see Rayoneir (NYSE: RYN), Weyerhaeuser (NYSE: WY) and MeadWestvaco (NYSE: MV) among the top 10-holdings for both ETFs. International Paper (NYSE: IP )is found among CUT's top-10, but not WOOD's.

Making a decision between these two funds is hard, but it is clear timber exposure is worth a look now. Over the last 30 years or more, there has been little or no positive correlation between the returns generated from timberland and those from either fixed-income or equity assets, according to Hard Assets Investor.

A long-term hold might want to opt for WOOD because of the lower expense ratio, but an active trader should go for CUT because of the of the superior liquidity. Consider this showdown a draw with a slight edge to CUT.

Disclosure None

5 Areas We’ll Feel Inflation; 5 ETFs to Fight Back

If you’ve been living on the cheap, that could soon change as inflation becomes an increasingly real prospect. Life could get more expensive, but you can use these exchange traded funds (ETFs) to keep it from becoming unbearably so.

When we see inflation, it will hit across the board, but some areas will feel it more than others. According to Economic Policy Journal, those areas are:

1. The Grocery Store: The USDA forecasts a 2% to 3% hike in the cost of all foods in 2011…Expect a big spike in the dairy case and meat counter, where pork alone is forecast to rise between 3% and 4%. [Play Food Price Shock With 4 ETFs.] PowerShares DB Agriculture (NYSEArca: DBA)


2. Gas and Natural Gas: Gas prices are on the rise, and that’s both the kind you use to fuel your car and the kind you use to heat your home in frigid winters. This is one area that could get more expensive even in the absence of inflation. United States Gasoline (NYSEArca: UGA)


3. Health Insurance and Medical Costs: Blue Shield in California said it was going to raise premiums by almost 60% and they’re not the only ones hiking rates big-time. iShares Dow Jones U.S. Healthcare Provider (NYSEArca: IHF)


4. Cotton Clothing: Cotton prices are on the upswing and you may already be feeling it. Cotton is now 80% more expensive than it was at the start of 2010 and many manufacturers are starting to pay it forward. iPath Dow Jones-AIG Cotton Total Return Sub-Index ETN (NYSEArca: BAL)


5. Banking: Checking fees, ATM fees, safety deposit box fees, talking to a teller fees. Some charge you even just to look at checks. Bank stocks, however, don’t look like they’re getting cheaper. SPDR KBW Bank (NYSEArca: KBE)

Disclosure None

Guggenheim Funds ETFs Declare Year-End and Capital Gains Distributions

Guggenheim Funds Investment Advisors, LLC, is pleased to announce that today the following Guggenheim Funds Exchange-Traded Funds (“ETFs”) have declared regular and periodic year-end distributions. The table below summarizes the distribution schedule for each Fund declaring a distribution.

Please note that some of the funds listed below were impacted by Passive Foreign Investment Company (PFIC) tax adjustments. PFICs are generally defined as non-U.S. corporations with 50% or more of their assets invested in cash or securities, or 75% or more of their gross income originating from passive sources. Passive sources include, but are not limited to rents, interest and dividends. As such, these foreign companies primarily generate their revenue from investments versus operations. The approximate percentage of the total distribution that resulted from the fund holding PFICs was as follows: EEB (1.3%), EEN (23.8%), XGC (6.9%), FAA (100%) and CQQQ (2.9%).

For All Funds: Ex-Date: 12/27/2010 Record Date: 12/29/2010 Payable Date: 12/31/2010

										Long-Term
Ticker		Monthly/Quarterly Distributions		Rate		Supplemental		Short-Term		Capital		Total
						Distribution		Capital Gain		Gain		Distribution
CVY		Guggenheim Multi-Asset Income ETF		$ 0.247		-		-		-		$ 0.247
ENY		Guggenheim Canadian Energy Income ETF		$ 0.179		-		-		-		$ 0.179
HGI		Guggenheim International Multi-Asset Income ETF		$ 0.186		-		-		-		$ 0.186
LVL		Guggenheim S&P Global Dividend Opportunities Index ETF		$ 0.107		-		-		-		$ 0.107
SEA		Guggenheim Shipping ETF		$ 0.163		-		-		-		$ 0.163
UBD		Claymore U.S. Capital Markets Bond ETF1		$ 0.071		$ 0.294		$ 0.249		$0.182		$ 0.796
ULQ		Claymore U.S. Capital Markets Micro-Term Fixed Income ETF2		$0.000		$0.005		-		-		$0.005
WREI		Wilshire US REIT ETF		$0.209		-		-		-		$0.209
										Long-Term
Ticker		Annual Distributions		Rate		Supplemental		Short-Term		Capital		Total
						Distribution		Capital Gain		Gain		Distribution
CGW		Guggenheim S&P Global Water Index ETF		$0.417		-		-		-		$0.417
CQQQ		Guggenheim China Technology ETF		$0.133		-		-		-		$0.133
CSD		Guggenheim Spin-Off ETF		$0.107		-		-		-		$0.107
CUT		Guggenheim Timber ETF		$0.594		-		-		-		$0.594
CZA		Guggenheim Mid-Cap Core ETF		$0.195		-		-		-		$0.195
DEF		Guggenheim Defensive Equity ETF		$0.388		-		-		-		$0.388
EEB		Guggenheim BRIC ETF		$0.863		-		-		-		$0.863
EEN		Guggenheim EW Euro-Pacific LDRs ETF		$0.770		-		-		-		$0.770
FAA		Guggenheim Airline ETF		$0.028		-		-		-		$0.028
FRN		Guggenheim Frontier Markets ETF		$0.126		-		-		-		$0.126
HAO		Guggenheim China Small Cap ETF		$0.443		-		-		-		$0.443
NFO		Guggenheim Insider Sentiment ETF		$0.201		-		-		-		$0.201
OTP		Guggenheim Ocean Tomo Patent ETF		$0.333		-		-		-		$0.333
OTR		Guggenheim Ocean Tomo Growth Index ETF		$0.365		-		-		-		$0.365
TAN		Guggenheim Solar ETF		$0.029		-		-		-		$0.029
TAO		Guggenheim China Real Estate ETF		$0.153		-		-		-		$0.153
WFVK		Wilshire 5000 Total Market ETF		$0.400		-		-		-		$0.400
WMCR		Wilshire Micro-Cap ETF3		$0.060		-		-		-		$0.060
WXSP		Wilshire 4500 Completion ETF		$0.335		-		-		-		$0.335
XGC		Guggenheim International Small Cap LDRs ETF		$0.429		-		-		-		$0.429
XRO		Guggenheim Sector Rotation ETF		$0.078		-		-		-		$0.078
YAO		Guggenheim China All-Cap ETF		$0.282		-		-		-		$0.282

¹The name of the Fund will be changing to the Guggenheim Enhanced Core Bond ETF and the Fund’s ticker symbol will change to GIY, anticipated to occur on January 24, 2011 (or as soon as possible thereafter upon receipt of necessary regulatory approvals from the Securities and Exchange Commission). At that time, the Fund’s investment objective will change. The Guggenheim Enhanced Core Bond ETF’s investment objective will be to seek total return, comprised of income and capital appreciation. At that time, the Fund will cease to operate as an index-based ETF, and will begin to operate as an actively managed ETF. ²The name of the Fund will be changing to the Guggenheim Enhanced Ultra-Short Bond ETF and the Fund’s ticker symbol will change to GSY, anticipated to occur on January 24, 2011 (or as soon as possible thereafter upon receipt of necessary regulatory approvals from the Securities and Exchange Commission). At that time, the Fund’s investment objective will change. The Guggenheim Enhanced Ultra-Short Bond ETF’s investment objective will be to seek maximum current income, consistent with preservation of capital and daily liquidity. At that time, the Fund will cease to operate as an index-based ETF, and will begin to operate as an actively managed ETF. ³Prior to August 20, 2010, the Fund’s name was Claymore/Sabrient Stealth ETF and the Fund sought to replicate an index called the Sabrient Stealth Index.

Past performance is not indicative of future performance. To the extent any portion of the distribution is estimated to be sourced from something other than income, such as return of capital, the source would be disclosed on a Section 19(a)-1 letter located on the Fund’s website under the “Literature” tab. A distribution rate that is largely comprised of sources other than income may not be reflective of the Fund’s performance.



Disclosure I am long CVY shares and waiting on a shot at SEA.