Guest Post: Updates On Four Previous Recommendations | George Spritzer

Each update will contain the publication dates of the original article on Yield Hunting and the public Seeking Alpha site, a review of performance , distributions paid, changes in discount, changes in the underlying investment thesis and the current recommendation.

Here are the original reports:

1) IFN- MS India Investment Fund (IFN)

Published on Yield Hunting : July 16, 2018 Discount was -12.33%

Published on SA public site: July 24, 2018 Discount was -12.76%

Distributions Paid (Ex-Dates)

- 9/21/2018 $0.71 (Managed distribution- income)

- 12/28/2018 $0.62 (Managed distribution- income $0.0372, capital gain $0.5828)

-12/28/2018 $1.7029 (Special Year-End- LT capital gain)

Recent NAV Performance from Morningstar

IFN One Year Discount History

Underlying Investment Thesis

Performance of the India stock market since the Summer has been somewhat erratic because of uncertainties about the upcoming India elections. But the long term investment thesis on India is still intact. India is the fastest growing major economy in the world and is on track to be one of the top three economic powers over the next 10-15 years backed by its strong democracy and partnerships.

The Indian economy increased 6.6 percent year-on-year in the last three months of 2018. This was somewhat below market expectations of 6.9%. This is the lowest growth rate in five quarters as weak consumer demand and government spending held back the expansion.

But to put things in perspective, a 6.6 per cent growth is still quite impressive for an economy as large as India. The GDP Annual Growth Rate in India averaged 6.21 percent from 1951 until 2018, reaching an all time high of 11.40 percent in the first quarter of 2010 and a record low of -5.20 percent in the fourth quarter of 1979.

Some other developments:

- The CPI inflation index in India rose only 2.33 per cent in November, 2018.

- Around 10.8 million jobs were created in India in 2017. India's unemployment rate is expected to be only 3.5 per cent in 2018 according to the International Labour Organization(ILO).

- India is expected to have 100,000 startups by 2025! This will create employment for 3.25 million people and about $500 Billion in value. (Source: Chairman of Manipal Global Education)

-India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to a shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.

Good Corporate Governance

I would give IFN a good overall rating on corporate governance. They have made a real effort to reduce the discount to NAV with the share buyback plan a high managed distributions.

IFN Share Buyback Program and Managed Distribution Policy: The fund has continued its share buyback program along with its 10% managed distribution policy. In January 2019, the fund repurchased 13,272 shares at an average discount of -11.01%. These two programs have helped to reduce the discount by a few percentage points to the current level around -10%.

Current Recommendation

The current discount for IFN is around -10.7%. This has narrowed by a few percentage points since my article were published. While I still like IFN on a long term basis, a short term trader may want to wait for a higher discount (say 12% or higher) before buying or adding to IFN. For longer term investors, I would continue holding IFN in IRA accounts.

Because of the large distributions that have been already been paid out, there may be unrealized capital losses available in taxable accounts. Tax harvesting can be utilized for those in higher tax brackets. You can sell IFN to realize the loss, wait 30 days, then buy it back again. Another alternative if you want to keep exposure to India would be to sell IFN and buy IIF which is another good India- based closed-end fund.

2) JRI- Nuveen Real Asset Income & Growth (JRI)

Published on Yield Hunting : Jan. 10, 2019 Discount was -14.79%

Published on SA public site: Jan. 17, 2019 Discount was -13.27%

Managed Distributions Declared Since Publication Date (Ex-Dates):

- 1/14/2019 $0.1060 (Income $0.0791, ROC $0.0269)

- 2/14/2019 $0.1060 (Income $0.0791, ROC $0.0269)

- 3/14/2019 $0.1060 (Income $0.0791, ROC $0.0269)

Recent NAV Performance from Morningstar

JRI One year Discount History

Underlying Investment Thesis

The underlying investment thesis for JRI has not changed since my article was published. JRI generates a high level of income by investing in real asset-related companies across the world and across the capital structure- common stocks, preferred securities and debt. Real asset-related companies include those engaged in owning, operating or developing infrastructure projects, facilities, and services, as well as REITs. In general, these businesses tend to produce steady, consistent cash flows.

Current recommendation

The current discount for JRI is still very attractive at -14.3%. I think the high discount may occur because JRI does not fit neatly into a Morningstar style box. But its longer term performance has been pretty impressive generating a 9.45% annualized total return since inception. I believe that JRI will eventually receive more support from institutional investors which should eventually narrow the discount. But because of the high discount and high distribution yield, some alpha is generated even if the discount remains the same.

3) NFJ- AllianzGI NFJ Dividend, Interest & Premium Strategy Fund (NFJ)

Published on Yield Hunting : Nov. 23, 2018 Discount was -12.76%

Published on SA public site: Dec. 1, 2018 Discount was -12.82%

Managed Distributions Paid Since Publication Date (Ex-Dates):

- 12/21/2019 $0.2250 (ROC)

- 3/08/2019 $0.2250 (ROC)

Recent NAV Performance from Morningstar

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NFJ One Year Discount History

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Underlying Investment Thesis

The underlying investment thesis for NFJ remains unchanged. It is a value-oriented covered call closed-end fund with the highest discount of all of its peers. NFJ has a very solid portfolio and is a good fund to buy when the over stock market has a big swoon like what happened last December. For a brief period, the discount rose to -16% and provided a great buying opportunity.

I am starting to see articles pointing out that value has underperformed growth for the last ten years, but this may be changing soon. Check out this article recommending global value stocks that was published March 6 in Barron's- It's Time to Buy Global Value Stocks, Bernstein Strategists Say.

Current recommendation

The current discount for NFJ is still quite attractive at -12.77%. We have experienced a long ten year period of outperformance by high performance growth stocks. But based on history, value-based strategies could be poised for a comeback as the overall economic environment becomes more challenging. We are starting to see weakness in some of the high growth plays like Tesla, Netflix and Facebook. Value stocks tend to do better in a rising interest rate environment which seems quite possible over the next decade. I believe that NFJ is a good way to play this long term trend without too much risk.

4) IGA- Voya Global Advantage and Premium Opportunity Fund (IGA)

Published on Yield Hunting : June 22, 2017 Discount was -8.71%

Published on SA public site: June 29, 2017 Discount was -8.67%

Managed Distributions Declared Since Publication Date (Ex-Dates):

- 07/03/2017 $0.2250 (Income $0.0698, ROC $0.1552)

- 10/03/2017 $0.2250 (Income $0.0428, ROC $0.1822)

- 12/28/2017 $0.2250 (Income $0.027, LT Gain $0.198)

- 04/02/2018 $0.2250 (Ord. Div. $0.041, Cap. Gain $0.063, ROC $0.121)

- 07/02/2018 $0.2250 (Ord. Div. $0.081, Cap. Gain $0.144)

- 10/01/2018 $0.2250 (ROC- est.)

- 12/28/2018 $0.2250 (ROC-est.)

Recent NAV Performance from Morningstar

IGA- One Year Discount History

Underlying Investment Thesis

The underlying investment thesis for IGA remains unchanged. It invests in a solid global equity portfolio of 100-150 stocks and writes covered calls against 50-100% of the holdings. It currently trades with an discount of -10% which is more than most of its peers. IGA uses portfolio hedging to smooth out its NAV returns. It has a very solid portfolio and is a good fund to buy when the over stock market has a big swoon like what happened last December. Since my article in June, 2017, there have been several trading opportunities available based on variations in the discount. In July-August, 2018, the discount fell to below 4% which provided a good opportunity to trim or sell the position. But then in late December the discount briefly rose to over 14% which created a great buying opportunity.

At the current 10% discount, IGA is still a good way to get equity exposure for a conservative investor who wants a steady income stream.