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Gabelli Global Gold GGN

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April 11, 2010 – Comments (1) | RELATED TICKERS: GGN

I love this closed end fund. It pays out over 8%. It earns the payments largely through premiums on covered calls written against gold mining companies held in its portfolio.

The biggest concern that I have right now is that the stock is selling at a 17% premium over its Net Asset Value.

1 Comments – Post Your Own

#1) On April 23, 2010 at 9:05 PM, Rickenbacker108 (< 20) wrote:

Some CEFs always trade at a premium--or so it would seem. Check out CEF_Connect: http://www.cefconnect.com I managed to purchase this @ a mere 4% premium. Such deviations from NAV vary widely. Also note that the "managed dividend" is probably ordinary income as opposed to a qualified dividend. Currently this distinction is important, but going forward it may be far less advantageous. The other thing to note is that it is virtually impossible to find gold stocks that pay any significant dividends--although I have not done a search for this in the last few months. Freeport McMoran (~39% gold, 60% copper) has a preferred that pays more than 6% (see WSJ's preferred stock list for closing quote and calculated yield%)--but I believe this is convertible and will be called before long (probably issued after their Phelps Dodge purchase).

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