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A global focus with an emphasis on dividends might seem like a strategy likely to provide some insulation from the impact of a bear market. But it hasn't worked out that well for the half dozen closed-end funds to most recently receive grades from TheStreet.com Ratings.
The six funds on the accompanying list crumbled more than 35% over the past 12 months, and each also sports double-digit percentage declines in both the latest three-month period and the year to date. The lackluster performances earned each fund a mark in the lowest possible "E" range, a grade from TheStreet.com Ratings that corresponds with a "sell" rating.
Five of the six funds were recently priced at discounts from their respective net asset values per share, with three quoted at discounts of more than 10% from NAV.
The BlackRock EcoSolutions Investment Trust (BQR) seeks to achieve current income and capital gains by investing at least 80% of its assets in equity securities issued by companies that are engaged in one or more of the new energy, water resources and agriculture business segments. It uses an option strategy to enhance current gains and is 58% invested outside the U.S.
Although the stated objective of the Cornerstone Progressive Return Fund (CFP) permits investment outside the U.S., its holdings were recently totally domestic. Cornerstone states in its objective, "The fund seeks current income as a component of total return by investing in dividend paying equity securities and U.S. dollar denominated debt securities."
True to that philosophy, the fund's top portfolio holdings include perennial blue chip stocks Exxon Mobil (XOM) - Get Report , General Electric (GE) - Get Report , Wal-Mart Stores (WMT) - Get Report , Microsoft (MSFT) - Get Report and Johnson & Johnson (JNJ) - Get Report .
An even more cautious approach is attempted by the First Trust Active Dividend Fund (FAV) , which seeks "current income and current gains, with a secondary objective of long-term capital appreciation" as its primary investment objective.
"The Fund may achieve its investment objectives by investing at least 80% of its managed assets in dividend producing equity securities of foreign companies or derivatives linked to such securities or indices that include such securities," FAV says in its objective statement.
As its name and Dutch parentage suggest, the ING International High Dividend Equity Income Fund (IID) - Get Report is 93% invested outside the U.S. But its international focus wasn't able to prevent its value from tumbling 41.33% over the past 12 months.
"The fund may invest at least 80 percent of its total assets in a diversified portfolio of dividend-paying stocks of issuers located throughout the world," states the John Hancock Tax Advantaged Global Shareholder Yield Fund (HTY) - Get Report . Its objective is "to provide shareholders an attractive total return."
HTY's scope is truly global with 51% of its portfolio in U.S. securities and the remainder scattered around the world. Its biggest holdings include stalwarts AT&T (T) - Get Report and Duke Energy (DUK) - Get Report .
Also close to a 50-50 U.S./international ratio is the Nicholas Applegate Global Equity & Convertible Income Fund (NGZ) . Its target portfolio mix is 65% equities and 35% convertible securities. The convertible portion is aimed at an average credit quality of investment grade.