Don't Be Surprised If Nuveen Raises QQQX's Distribution

seekingalpha02-29

AntonioSolano On Jan. 30, I wrote this article, Don't Be Surprised If EOS Raises Its Distribution. And though Eaton Vance didn't follow up this month with a distribution increase for the Eaton Vance ...

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And though Eaton Vance didn't follow up this month with a distribution increase for the Eaton Vance ...</p>\n\n<a href=\"https://seekingalpha.com/article/4674780-do-not-be-surprised-if-nuveen-raises-qqqx-distribution\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Don't Be Surprised If Nuveen Raises QQQX's Distribution</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDon't Be Surprised If Nuveen Raises QQQX's Distribution\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-02-29 22:20 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4674780-do-not-be-surprised-if-nuveen-raises-qqqx-distribution><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>AntonioSolano On Jan. 30, I wrote this article, Don't Be Surprised If EOS Raises Its Distribution. And though Eaton Vance didn't follow up this month with a distribution increase for the Eaton Vance ...</p>\n\n<a href=\"https://seekingalpha.com/article/4674780-do-not-be-surprised-if-nuveen-raises-qqqx-distribution\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE0004445239.USD","symbol_name":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4674780-do-not-be-surprised-if-nuveen-raises-qqqx-distribution","article_id":"2416527395","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1355516776/image_1355516776.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2416527395","pubTimestamp":1709216417,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Well, maybe not to an individual investor, but to an institutional investor, it might make all the difference in the world if they put a precedence on funds that are raising their distributions. Don't get me wrong, EOS has performed great, both at NAV and MKT price over the last year too and has largely kept up with its benchmark, the iShares 1000 Growth ETF , $330.21 closing market price, despite using a moderately defensive option write strategy on its individual stock holdings. Here's a 1-Year Total Return NAV and MKT price comparison between EOS and IWF: YCharts But as you can see, EOS' market price total return  lags significantly behind its NAV performance, and I'm guessing a big reason for that is simply the fact that EOS' market yield is now down to +6.9%. And that's the lowest yield the fund has paid since Eaton Vance cut the distributions of most of their equity CEFs in November of 2022. That's actually a positive from an appreciation standpoint since that just means EOS' mar","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0082616367.USD":"摩根大通美国科技A（dist）","QQQ":"纳指100ETF","IWF":"罗素1000成长指数ETF-iShares","LU0061474960.USD":"天利环球焦点基金AU Acc","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","EOS":"Eaton Vance Enhanced Equity Inco","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","BK4549":"软银资本持仓","BK4548":"巴美列捷福持仓","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","NVDA":"英伟达","LU0708995401.HKD":"FRANKLIN U.S. OPPORTUNITIES \"A\" (HKD) ACC","QQQX":"Nuveen NASDAQ 100 Dynamic Overwrite","BK4532":"文艺复兴科技持仓","EOS.AU":"ELECTRO OPTIC SYSTEMS HOLDIN","NVDY":"YIELDMAX NVDA OPTION INCOME STRATEGY ETF","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","BK4534":"瑞士信贷持仓","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC"},"translate_title":"如果Nuveen提高QQQX的发行，不要感到惊讶","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EOS":1,"EOS.AU":1,"IWF":1,"NVDA":1,"QQQX":1,"QQQ":1,"NVDY":1,"US3Y.BOND":0.9,"US7Y.BOND":0.9,"US6M.BOND":0.9,"US5Y.BOND":0.9,"US10Y.BOND":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6,"US912796Z285.BOND":0.6,"US912797HH31.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GP65.BOND":0.6,"US912797GQ49.BOND":0.6,"US912797GW17.BOND":0.6,"US912797GX99.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HG57.BOND":0.6},"content_text":"AntonioSolano On Jan. 30, I wrote this article, Don't Be Surprised If EOS Raises Its Distribution. And though Eaton Vance didn't follow up this month with a distribution increase for the Eaton Vance Enhanced Equity Income II fund (EOS), $19.95 closing market price, I do think it's only a matter of time before they do, and the next chance will be this Friday when most CEF fund sponsors will declare their March monthly and quarterly distributions. Because if Eaton Vance wants to see their equity CEFs take a step back up in valuations, they'll need to give an incentive for investors to want to buy their shares and hold onto them, particularly for large institutional investors. That's because there's simply too much competition for higher yields now, both in equity and fixed income, and if you want to go the extreme, you can find 50%-plus or more annualized \"yields\" in some YieldMax ETFs based on current distributions. Those funds may be nothing but gimmicks and the end result will likely be NAV destruction and poor overall total return performances. But right now, they're drawing in the fast-money traders and yield obsessed investors because their underlying stocks can be up 200% or more over the past year, like Nvidia (NVDA), $787.01 closing market price. But would a fund like the YieldMax NVDA Option Income Strategy ETF (NVDY), $28.65 closing market price, cater to the same risk tolerance of an investor in EOS? Probably not, but when you compare NVDY's +63% current yield with EOS' +6.9% current yield, and then add in NVDY's total return over the past year of +99.1%, the FOMO or Fear of Missing Out, may mean that even low-risk, retiree income investors may be more inclined to take a shot on NVDY over EOS. But would a distribution increase even make a difference for EOS if the bump up in yield only took it to say, an +8.0% market yield? Well, maybe not to an individual investor, but to an institutional investor, it might make all the difference in the world if they put a precedence on funds that are raising their distributions. Don't get me wrong, EOS has performed great, both at NAV and MKT price over the last year too and has largely kept up with its benchmark, the iShares 1000 Growth ETF (IWF), $330.21 closing market price, despite using a moderately defensive option write strategy on its individual stock holdings. Here's a 1-Year Total Return NAV and MKT price comparison between EOS and IWF: YCharts But as you can see, EOS' market price total return (in purple) lags significantly behind its NAV performance, and I'm guessing a big reason for that is simply the fact that EOS' market yield is now down to +6.9%. And that's the lowest yield the fund has paid since Eaton Vance cut the distributions of most of their equity CEFs in November of 2022. That's actually a positive from an appreciation standpoint since that just means EOS' market price has gone ramp-up since then. But if the fund has kept its lowered monthly distribution the same over that time, then that means EOS' market yield has actually gone down. You then also have to compare that over a time in which interest rates were going up, so can you see how EOS may not be as attractive today from a yield standpoint, despite gaining +33.3% at market price over the last year? And this has created the falling market price valuation dilemma not only for the Eaton Vance equity CEFs, but also for the Nuveen equity CEFs too. Higher market prices in a bull market just means lower annualized yields if their distributions stay the same. But in a high inflation and high interest rate world, that just means more competition for yield hungry investors and less attractiveness as their yields go down. How to overcome that? Simply by raising the distribution rates, and no Eaton Vance fund deserves it more than EOS. With an NAV up +42.0% over the last year (orange line in the graph above), do you think Eaton Vance could raise EOS' distribution from its current +6.5% NAV yield? Yes it can! When Eaton Vance cut EOS' distribution on November 1st, 2022, EOS' NAV was $16.07. Today, its NAV is $21.25 even after paying all those distributions since then. Case closed. Eaton Vance needs to start raising its fund's distributions, starting with EOS. And among the Nuveen option-income CEFs, the Nuveen NASDAQ 100 Dynamic Overwrite fund (NASDAQ:QQQX), $23.81 closing market price, is the nearest comparable to EOS and also should be in a position to raise its distribution too. As technology stock focused funds, both have shown impressive NAV and market price performances over the last year, but look at QQQX's market price valuation drop as shown in its premium/discount chart over the past year: CEF.Connect Would you have expected that from a fund whose NAV total return performance is up +31.3% over the same period? Though that trails its benchmark Nasdaq-100 (QQQ), $436.55 closing market price, by a pretty wide margin, up +51.0% by comparison, QQQX also uses an option write strategy that can be as high as 75%, and I'm guessing they're probably using that higher percentage now with technology stocks rallying to all-time highs. Note: An option-write strategy essentially sells future appreciation potential of the fund's portfolio for income today. And the higher the percentage of options written, the higher the income generated but the less upside capture you can expect from the NAV in a bull market But more importantly for this article, QQQX's NAV yield also is at a very low +6.5%, so clearly, there is room to raise here as well with its NAV up +31.3% over the last year. Will Eaton Vance and Nuveen raise distributions for EOS, QQQX and possibly others when they declare March distributions? If they want to see their funds finally start to show some valuation increases, they will.  We should find out this Friday, March 1.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2416527395"}