|APPLYING ENERGY INTELLIGENTLY |
CLOSED-END EQUITY FUNDS THAT BUCKED THE OCTOBER BLACKOUT
|NAME||Evergreen Global Dividend Opportunity Fund||John Hancock Tax-Advantaged Dividend Income Fund||ING Risk Managed Natural Resources Fund||MLP & Strategic Equity Fund Inc|
|INVESTMENT OBJECTIVE||Global Equity||Equity Income||Sector - Energy/Natural Res||Sector - Energy/Natural Res|
|TheStreet.com RATINGS GRADE||E+||C||C-||E-|
|ADVISOR||Evergreen Investment Management Co, LLC||John Hancock Advisers,LLC||ING Investments, LLC||IQ Inv Adv|
|TOTAL NET ASSETS (MIL.)||$868.1||$358.6||$429.2||$229.4|
|TOTAL EXPENSE RATIO (%)||1.14||1.51||1.17||1.3|
|ANN'L PORTFOLIO TURNOVER (%)||101||10||57||2|
|1-MONTH TOTAL RETURN (%)||3.39||3.54||1.27||22.33|
|12-MONTH TOTAL RETURN (%)||-27.57||-31.66||-17.06||-12.98|
|Data as of 10/31/2008. Source: TheStreet.com Ratings & Bloomberg For an explanation of our ratings, click here.|
As the price of petroleum and the stock market collapsed in October, it would seem almost beyond belief that the only closed-end equity funds to gain were energy plays. Intelligent investment strategies involving energy infrastructure, production and delivery, with a heavy focus on natural gas, helped propel each of the quartet of funds in the accompanying table to positive returns last month. They were the only closed-end equity vehicles with performance numbers prepended by plus signs. Like virtually all "long-side" stock funds, each of the four is lower for the year to date, albeit by distinctly lesser magnitudes than the S&P 500. The stated objective of the Evergreen Global Dividend Opportunity Fund ( EOD) is to "normally invest 65% of its total assets in securities of issuers in the utilities, energy and telecommunications fields." As befits the "Global" in its name, EOD's largest investments are in France's Suez, which is primarily involved in electricity and natural gas, and United Utilities PLC of the U.K., which supplies water -- now commonly referred to as "the new oil" -- and natural gas. Its largest U.S. stocks include Exelon Corp. ( EXC), an electric utilities company, and Questar Corp. ( STR), which is in natural gas production and delivery. The John Hancock Tax Advantage Dividend Income Fund ( HTD), because of a creative dividend strategy, is technically classified as an equity income fund. "Under normal conditions," states HTD, "the fund will invest at least 80% of its assets in dividend-paying common and preferred securities that the adviser believes at the time of acquisition are eligible to pay dividends which, for individual shareholders, qualify for U.S. federal income taxation at rates applicable to long-term capital gains, which currently are taxed at a maximum rate of 15%."
The securities HTD currently holds for its tax-advantaged process are largely involved in the energy industry, with a concentration in natural gas. They include ONEOK ( OKE), which purchases, transports, stores and distributes natural gas; energy delivery firm NSTAR ( NST); Integrys Energy Group ( TEG), a gas and electric utility firm; and Spectra Energy ( SE), which holds natural gas assets. The ING Risk Managed Natural Resources Fund ( IRR) lived up to the "Risk Managed" in its name by steering clear of the petroleum price decline in October. Its biggest recent portfolio holdings included a diverse mix of exploration, energy infrastructure and integrated oil and gas firms. They include dominant standbys Exxon Mobil ( XOM), Chevron ( CVX), Schlumberger ( SLB) and Halliburton ( HAL). The stated investment objective of the MLP & Strategic Equity Fund ( MTP) "is to provide a high level of after-tax total return by investing all its assets in a portfolio of publicly traded master limited partnerships operating in the energy infrastructure sector of the market." In energy infrastructure, MTP picked an ideal sector for riding out the October bloodbath, enhancing its value a whopping 22.3% for the month. Its main holdings include Kinder Morgan Management ( KMP), Enterprise Products Partners ( EPO), Plains All American Pipeline ( PAA) and ONEOK.