The Case For AOD

Some closed - end funds are trading significantly below net asset value. Several funds in the closed-end fund arbitrage space have been liquidated in the past month. It only takes a small amount to drive these stocks down but they are usually decent arbitrage plays. The arbitrage occurs when a CEF with $100 in assets, trades at $80 and yields 15%+. Historically, these have been always good opportunities and these are starting to make up the bulk of my portfolio. Here is an example:

The Alpine Total Dynamic Dividend Fund (AOD) is down 8% today on no news. It is a closed end fund trading at an 8% discount to NAV (when normally this is one of the few funds that trades historically at a premium) as of yesterday's close with a 30% yield.

From September 18 through October 15, the Alpine Total Dynamic Dividend Fund has bought back over 112,000 shares

Jill Evans, the portfolio manager of the fund had this to say recently: "we know the Fund's holdings represent strong value right now [and seeing discounts] on a strategy using dividend paying stocks and no leverage, no options, no bonds, and no preferred stock made it clear to us we had to take advantage of this for our shareholders."

The stock was at $12 at the beginning of September. So down almost 50% since then. Along with Ms. Evans, I'm a buyer.