RE:RE:RE:RE:GLTALongs. Burn the shorts. 9:46AM ET on Monday Dec 20,I think there are chiefly two types of investors attracted to them: (1) impulsive yield-seekers who don't fully understand the split funds, and (2) opportunists who spot a badly-beaten fund they think has the right kind of underlying stocks for full recovery.
There are disaster scenarios where a large gain can be made in a short period of time on certain split funds. My son and I got a double in 8 months on one fund due to the pandemic. If similar circumstances arise again for that fund, we'll try it again. But it required a market shock bad enough to halt the common-share dividend for a number of months, driving the market price down to a big discount on NAV ... this doesn't happen often. The yield-seekers tend to keep the market price at a premium to NAV while the dividend seems safe.
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autofocus111 wrote: @TT Thanks for the explanation. If I understand it correctly, the 'higher' dividend paid to common shareholders of the fund relies on an increasing ENB share price (and therefore higher fund NAV) and the leverage of the common shares to that rising NAV. And likewise downside for a dropping share price. Hard to see what the advantage of this 'accelerated capital gains/losses' mechanism is for simple investors. I'm guessing its somehow tax-related. Anyway, I think I'll stick to holding ENB directly.