New Fund Capitalizes on Two Strategies

Recently I wrote favorably about the Alpine Global Dynamic Dividend Fund (AGD Quote) for its then-unique dividend rotation strategy, which, simply put, seeks to double up the dividend yield by trading stocks around their dividend dates so that it doubles the yield but still qualifies for favorable tax treatment.

I have also written several articles favorably disposed (in moderation) toward the call-selling, closed-end funds that seek to enhance yield by selling options against a portfolio of stocks.

Both types of funds tend to offer very high yields and have low volatility. These traits have a place in most individual portfolios, although in differing proportions.

Eaton Vance just listed a closed-end fund called the Eaton Vance Tax Managed Diversified Equity Income Fund (ETY Quote). ETY captures both strategies, dividend rotation and call-writing, a veritable cornucopia of fund fads. ETY is the largest closed-end fund IPO ever -- it raised $2.6 billion. ...