All distribution announcements are from the 'Allspring' family of funds.

Question From a Subscriber

I received a question from a new subscriber this week that I thought would be helpful to the community, and she enthusiastically gave me her blessing to report the conversation here. Thank you, Patricia C., Her question is in bold, and my response is in italics.

HI Lee One more question regarding CEFs generally.

I am retired and have now switched most of my equity portfolio to income producing CEFs which your CEF master helped me to do easily as I used the metrics that are presented in such an easy to use form.

My question is: Is there some metric other than the Final Score and the Distribution Months Remaining that I should be monitoring to determine if it is time to replace a CEF in my account?

Thanks in advance for all your assistance!

My reply:

Hi Patricia,

First and foremost, should any of your funds lose qualifying status, do not panic. If overall market conditions seem relatively healthy, you should have time to be strategic about what to do with the fund, maybe even continue to hold it. You'll notice that over the weeks, there may be very few distribution cuts announced because just about everything is doing relatively well right now.

When the market starts to head down in dramatic fashion (10% correction or worse), that's when you should brace for impact should your funds lose qualifying status. The estimated number of distributions remaining will be crucial here. If that number dips below zero, that means the fund has no margin of safety from earnings left.

At this point, you have to consider whether the fund exhausted its earnings through cash outflows or unrealized losses (you may not know this until the fund next reports). Unrealized losses aren't as bad as running out of cash, but once a fund goes negative accumulated earnings, tough decisions will have to be made by management, which may include a distribution cut.

Another thing you'll have to consider at that point, since in a major market move to the downside, generally all asset prices follow, is that, even though the fund is no longer a gem, how does it compare to all other funds that are experiencing similar declines.

Now, 'CEF Mastery' is not in the business of making predictions, but 'CEF Mastery' has a history of such situations. The crash of 2020 and the bear in 2022. In the bear of 2022, of all the funds that lost qualifying status (from 112 funds down to 4), about sixty-nine percent went on to cut their distributions while also continuing to decline in market value by sizable percentage amounts before the cuts were announced.

Here is a video I made about it.

Closed End Fund Mastery - Fund Performance After Losing 'CEF Mastery' Status

And, because it makes me feel good, I'm posting her reply to my reply.

Please feel free to share our conversation and credit me as the inquirer. You have been a tremendous help to me and I thank you.

Thanks again

BDC Scorecard

I have improved the 'BDC Scorecard' from last week. It now spans three pages with column headers on each individual page, so you do not have to scroll all the way to the top of the list to see which header a column falls under. Link is at the bottom of this email.

BDC's are now reporting, so there should be a major update to the scorecard next week.

The 'Divi-X' System High Yield Portfolio Performance

This portfolio was created solely for the purpose of this weekly update. It is real money. It is intended for informational purposes only.

Inception date: 07/19/23

Portfolio performance as of Today @ 11:00 a.m. est. Distributions are 'Not' reinvested.

The 'Divi-X' high yield portfolio is an aggressive use of the 'Divi-X' system. There are more conservative uses of the 'Divi-X' system that can have a very satisfying result on your returns as demonstrated in the following video.

The 'Divi-X' System - Dividends on Steroids

The 'Divi-X' system utilizes leverage and can be considered very risky. Use at your own risk! The 'Dividend Times' makes no claim that using the 'Divi-X' system will outperform the market.

I am in the process of creating a worksheet of 'The 'Divi-X' High Yield Portfolio' holdings which I will eventually be posting here as a download for transparency. It will go into detail about positions held, why they were sold, and any other pertinent information. That info is too lengthy to post every week in a newsletter.

Feel free to send me questions or comments. Have a wonderful weekend.

Lee

TheDividendTimes@outlook.com

704-293-8330

If you are a new subscriber, expect the 'CEF Mastery' Weekly Report to come out every Saturday.

Just a reminder that 'ETF Mastery' is free to 'CEF Mastery' subscribers while in its development stage.

If you aren't a subscriber, a free 'CEF Mastery Super Screener and Interactive Report' is available by entering 'Free Report' in the subject line of your email to the address TheDividendTimes@outlook.com.

or

You can receive one free month of reports (weekly) with an annual subscription of just $49.95/yr.

Subscribe @ 'CEF Mastery' Closed-End Fund Subscription (gumroad.com )

'Closed End Fund Mastery' is best viewed in Microsoft Excel (Excel 365 to use charts).

See 'Closed End Fund Mastery' in action. Video links below.

‘CEF Mastery’ Introduction – Be A High Yield Master: https://youtu.be/xR9ZmD0LxRM

‘CEF Mastery’ Quick Start 1 – Super Screener - https://youtu.be/-cABQvyVMwI

‘CEF Mastery’ Quick Start 2 – Fund Comparison - https://youtu.be/1GCrtriBQVY

"What Makes the 'Closed End Fund Mastery' Super Screener So Super?' - https://youtu.be/H1AM958Ie_w

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