FYI: With up and down swings of 20% and more in a matter of months, PGP is a really volatile fund. And note those big dips in mid-2016 and mid-2017. There’s only one reason why huge drops like those appear for a closed-end fund (CEF) like PGP: dividend cuts.
PGP has cut its dividend twice in the last three years, and that’s likely just the beginning.
Over the last six months, PGP has earned less than three-quarters of its dividend payout, although dividend coverage has been improving in the last couple months. Still, that’s unlikely to last long, because of PGP’s portfolio.
Despite the name, PGP’s portfolio doesn’t have many stocks in it—in fact, stocks make up less than 10% of the fund’s holdings. Instead, PGP has a lot of bonds—and since management is betting on rising interest rates, many of PGP’s holdings are short-term bonds that have really small yields.
Regards,
Ted
https://www.forbes.com/sites/michaelfoster/2018/08/25/this-popular-fund-pays-9-4-sell-now/?ss=etfs-mutualfunds#36dc10373fb5M* Snapshot PGP:
https://www.morningstar.com/cefs/XNYS/PGP/quote.htmlM* PGP Distribution:
http://cef.morningstar.com/distribution?t=PGP®ion=usa&culture=en_US
