RE:CtfI would recommend the Energy Income Fund (ENI.UN).
ENI.UN is a closed-end fund, the fund is trading at a 16% discount to NAV and is currently yielding 9.8% paid monthly. The fund holds an interesting collection of energy stocks (WCP, CEN, VET, BTE, PPL among others):
https://artemis.mobilelinkage.com/fundfiles/portfolio/ENI.UN Quarter ending Mar 31, 2013.pdf
Positives:
- You get a collection of high quality income and energy names at a 16% discount to their market value.
- Most of the yield is a return of capital
- The fund redeems 10% of its shares at NAV every year, and has offered multiple special redemption at NAV in the past.
- No debt.
Negatives:
- Due to the small size of the fund ($29m in assets) its management fees are quite high close to 2.5%.
- The fund is paying its dividends from selling the shares of its portfolio companies, thus it is shrinking further over time. - Most of the portfolio dividend payments are going to pay the fund expenses.
- Terminating the fund would incur a 5% of NAV payment to the manager.
All in all, I have a bullish stance towards the Canadian energy sector as I believe the strong price of oil and the smaller differentials have not yet filtered through to the Canadian energy names. ENI seems like an interesting way to get income, own a collection of energy assets at a discount and potentially profit from a rebound in the sector.
For more information on the fund you can check here:
https://artemis.mobilelinkage.com/investment_products.php?id=31
Regards,
Nawar
Disclaimer: Long ENI