Hydrangea Bushes, Madeira, Portugal
It has been 3 months since I last reported on the performance of the Hawking Portfolio – basically because it is essentially a “Buy-And-Hold” portfolio of Closed-End-Funds (CEFs) that pay out high monthly distributions/dividends and requires very little attention. In my last review I outlined why it is sometimes difficult to analyze these funds since not all the “distributions” are covered by Investment Income (true dividends or growth in asset value) with the difference being a Return of Capital that results in a lowering of Net Asset Value (NAV).
In the last review I explained why I had sold holdings in FSK and was preparing to sell EIC which I did. It was certainly a good decision to sell FSK since it has lost over 30% of its value since that time:
EIC remains at about the same price, but at least I have reduced my exposure to the CLO (Collateralized Loan Obligation) class of funds that have come under a lot of pressure over the past 6 months or so.
Current holdings in the portfolio look like this:
with a 10.6% anticipated “income” yield. Since I am holding ~$14,000 Cash following the sale of FSK and EIC, and have collected 3 months of dividends, I shall be looking for places to invest this cash so as to bring the portfolio yield up closer to 12%. I had been holding off on this expecting a September pullback in prices – but this did not obviously happen. However, performance over the past month has not exactly been stellar:
with an erosion of NAV balanced by equivalent distributions but with little or no growth despite the bullish market environment. However, we remain ahead of the benchmark AOR Fund over the (almost) 5 years since inception.
I will update this post should I find new investments as I review current opportunities in the CEF space.
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