RE:RE:RE:RE:NAV @ 2:45 pmThe dividends collected from the underlying portfolio for DGS is insufficient to cover the dividends paid out even to preferred shareholders, let alone the capital shareholders. That does not even take into account the management fees, although they are quite reasonable.
All of these split funds rely on capital appreciation to sustain dividends to both classes of shares. The primary reason the NAV has failed to achieve earlier levels is that the fund was forced to sell some of its holdings at depressed levels to pay for dividends to preferreds and to cover management expenses. They also had to raise cash to pay for the shares tendered into the Quarterly Retraction Privilege.
When markets are rising, most of these problems disappear. It only takes one of the larger sectors of the fund to outperform the general markets in order to achieve spectacular results.
Splitfunding wrote: I was wondering why the NAV for split funds didn't reach previously attained levels despite the bounce back in the underlying stocks... Suppose that should have been obvious in hindsight, capital gains being used to pay the divy. But I always thought that the actual divided of the underlying holdings was also used for that, at least partially. Which begs the question... what does happen to the actual divideds?? Divideds of the underlying holding should be enough to cover about half of the divy for preferred shares for most split funds and yet I haven't seen them ever be mentioned as being part of the calculation for the NAV for any split funds.