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Bob Cecchini
I assume that the recommended Eaton Vance funds are best held in a taxable account, but are there any negatives to holding them in tax advantaged accounts?
Igor Greenwald
The distributions for both were a mix of qualifying dividend income and long-term capital gains during the last fiscal year, so you’d actually do better to hold them in a tax-deferred IRA, since they are unlikely to saddle your account with a bill for unrelated business taxable income, unlike some MLPs.
both EVT and ETO have been moving up nicely
do you think evaluations above NAV are a concern? And at what point above NAV would you stop accumulating these ?
Igor Greenwald
I’m not that concerned; I think these are being priced based on the yield, and ETO at +6% to the NAV is still yielding 8%, a bit more than EVT at its 1% discount to the NAV. The game plan here is to stay with these until the nature of the market changes; as I’ve written before these are essentially bull-market vehicles. But if ETO were to trade at, say, a 10% NAV premium I’d probably move it to a Hold.
Stock Talk
Bob Cecchini
I assume that the recommended Eaton Vance funds are best held in a taxable account, but are there any negatives to holding them in tax advantaged accounts?
Igor Greenwald
The distributions for both were a mix of qualifying dividend income and long-term capital gains during the last fiscal year, so you’d actually do better to hold them in a tax-deferred IRA, since they are unlikely to saddle your account with a bill for unrelated business taxable income, unlike some MLPs.
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pipeline
both EVT and ETO have been moving up nicely
do you think evaluations above NAV are a concern? And at what point above NAV would you stop accumulating these ?
Igor Greenwald
I’m not that concerned; I think these are being priced based on the yield, and ETO at +6% to the NAV is still yielding 8%, a bit more than EVT at its 1% discount to the NAV. The game plan here is to stay with these until the nature of the market changes; as I’ve written before these are essentially bull-market vehicles. But if ETO were to trade at, say, a 10% NAV premium I’d probably move it to a Hold.
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