RE: RE: RE: Still holding on Thanks for your response.
My calculations show that the fund's NAV would have to rise by exactly $0.60 for current investors to break even, after dividends: Current trading premium is $6.26 - $4.51 = $1.74. If we subtract 13 months of dividends of $1.14, we get $0.60.
This means that the fund's portfolio would have to rise by 0.60/4.51 = 13.3% for investors just to break even. In other words, you'll make no money on this investment, even with the dividends, if the portfolio rises by 13.3% by next November.
This is tantamount to paying a management expense ratio of 13.3% on a fund which pays zero dividends. Or, more appropriately, it is exactly like buying a fund which pays a 16.8% dividend, but has an insane management expense ratio of 30.1%!
The only advantage to this fund is that whenever an investor redeems his capital shares, the fund is obligated to buy an equivalent number of equity shares from the market to balance the redemption, so the fund gets an occasional lift regardless of its fundamentals. However, you don't seem to be looking for short term gains at such high risk.
Why not buy STQ.E, which pays a 13% dividend, but is trading at virtually no premium whatsoever? If both portfolios rise by 13.3% by termination, you will gain nothing on CGQ.E whereas you will make 26.3% on STQ.E.
My rationale tells me it is almost an absolute certaintly that anyone holding to termination will make significantly more on STQ.E than on CGQ.E as their portfolios are so similar.
Trying to make sense of these market dislocations is enough to drive one insane!