Here's one with a 14% discount. Looks like all their funds are trading at a discount. https://individuals.voya.com/produc...infrastructure-industrials-and-materials-fund
according to CEF/ETF Income Laboratory Performance - Weak Past Results, Attractive Discount As we touched on above, the historical positioning of the portfolio has worked against this fund. Here is how poor the past performance has been with the fund. IDE Annualized Performance(Voya) Given the unique characteristics of this fund, there isn't an alternative that makes a lot of sense. Morningstar has the fund classified as a "Global Equity" fund. That isn't too far from the truth, but defining some CEFs is difficult. They invest in quite a niche group of holdings, and IDE represents that. If you look at other global equity funds, they are going to be holding the MAMAA stocks (Microsoft (MSFT), Alphabet (GOOG), Meta Platforms (FB), Amazon (AMZN) and Apple (AAPL)) in significantly overweight allocations sometimes. On the other hand, its differentiation has helped the stock in 2022 so far. YTD it is leading against the Invesco QQQ (QQQ), which is a representation of the Nasdaq 100 and the SPDR S&P 500 ETF (SPY). Despite the outperformance on a total NAV return basis, by not declining as much as these broader index trackers, the fund has still slipped by a meaningful amount on a total share price basis. Data byYCharts That has resulted in one of the primary selling points of this fund, that deep discount that has only become deeper. Over the last 10 years, the fund has averaged a discount of 8.47%. Some of last year's contractions should also be highlighted. That came from the fund's tender offer that Saba forced into them. That saw IDErepurchase 15% of the outstandingshares they had at the time at 98% of NAV. After that, the fund even flirted with a premium that was uncharacteristic of the fund. It could have indicated that investors might not have realized why the fund was rising so rapidly, and they wanted to tag along. Data byYCharts Even if the tender offer didn't happen last year, shares still look relatively cheap. Distribution - 8.32% But Multiple Cuts Given the performance that we saw from the fund above, it shouldn't come as too much of a surprise at the number of distribution cuts along the way. The current 8.32% is relatively attractive - although it is paid quarterly. Some income investors will disregard the fund for that point. On a NAV basis, it comes to 7.24%. That is generally a fairly sustainable level, but the fund hasn't delivered that since its launch in 2010. IDE Distribution History(Voya) As an equity fund, they will rely heavily on capital gains to fund their distributions. That is capital gains from their underlying holdings and the option writing. Looking at the lastSemi-Annual Reportavailable, we can see that the fund for those six months has covered its distribution. For the full year of 2021, the performance was strong enough to cover its distribution. So far, in 2022, the NAV has declined, so we would have to see that reverse through the rest of the year to consider it covered. Given the fund is holding up relatively well, it might even be better positioned than most other equity funds. At least, given the very brief period we've completed at this point. IDE Semi-Annual Report(Voya) They appear to write calls against several different ETFs, at least according to their previous report. That included; Industrial Select Sector SPDR (XLI), iShares MSCI EAFE ETF (EFA), iShares MSCI Emerging Markets ETF (EEM) and Materials Select Sector SPDR (XLB). They don't own these ETFs, meaning that they are writing naked calls. On the other hand, they own many individual positions that would make up these ETFs. Therefore, indirectly, it is being partially hedged. The written options did not contribute to capital gains in this previous report. Instead, the strategy lost nearly $741k. This isn't that uncommon for option writing funds as they typically generate losses. With losses frequently occurring, it isn't too surprising to see that a lot of the distributions have been return of capital for this fund. In 2020, it wouldn't necessarily be a destructive return of capital, but it has been in previous years. IDE Semi-Annual Report(Voya) IDE's Portfolio Besides the fund's attractive discount, this can be another positive area for the fund. A CEF is only as good as its underlying holdings and strategy. The strategy of investing in value-oriented stocks certainly has appeal at this time. Even some of the largest positions in the fund are rather attractive; it really just hasn't been a strong area to invest in historically. Of course, it is an actively managed fund, so it is always changing too. The fund last reported a turnover of 32% for a six-month period. In 2021's full fiscal year, they reported a 58% turnover. Below are the fund's sector weightings and top country weightings. IDE Weightings(Voya) At this time, the electric utilities and integrated telecommunication stocks make up the bulk of the fund. However, we also don't see strong overweight weightings in any particular industry either. It is fairly diversified within these sub-sectors. In my opinion, I almost wish this fund had heavier exposure to industrial and materials. There are a number of utility/infrastructure funds that one can invest in to gain that exposure. A heavier industrial positioning fund would be more unique. Aberdeen Standard Global Infrastructure Income Fund (ASGI) has a heavier focus on industrial stocks, which is one nameI've been bullishon and buying. However, it has a lot to prove too. When looking at the top ten holdings, there are several that are great dividend growth stocks. IDE Top Ten(Voya) Verizon (VZ), for example, is a regular staple for dividend growth investors. That being said, while the dividend continues to be increased year after year, it still hasn't performed well. Over the last 5 years, an investor would have gained 8.86% from the share price. The majority of the returns came via the dividends and if they were reinvested. Even then, the stock's performance would be a stretch to call "good." Data byYCharts The real benefit of something like VZ for individual investors is to see that quarterly income grow year after year. In IDE, that doesn't work because they don't have time. They are trying to meet a 7%+ distribution yield. Every time they miss that mark, it erodes assets and becomes even harder to attain. If you thought VZ was bad, Vodafone (VOD) has been even worse. Here is their performance over the last 5 years. For those interested in fun facts, VOD actuallyowned a substantial chunkof VZ at one time before divesting it in 2014. It looks like VOD has got some love lately when it received a bid forits Italian unit. Otherwise, I'm not entirely clear about the angle of investing in VOD at the moment. Data byYCharts We then have some interesting positions such as CSCO, Deere (DE), Deutsche Post (OTCPKPSTF)(a German stock traded OTC in the U.S.), BHP Group (BHP) and NextEra Energy (NEE), providing quite the mishmash of holdings as I mentioned previously. We have a tech play that can be classified as an infrastructure play, DE as an agricultural industrial stock, and DPSTF is a "mail and logistics" company that is classified as an industrial name. Then we have BHP, a mining company located in Australia but operating worldwide in the materials sector. Then there is NEE thrown in for good measure as a renewables-oriented utility name. Don't forget the number two spot, the iShares MSCI ACWI ETF (ACWI), because at this point, why not throw in an international ETF? To round of this list, we have CSX Corp (CSX) and Sempra (SRE) - a railroad company and a multi-utility stock. SREdropped the "energy" partof their name in 2021. Here is the performance of these stocks over the last 5 years. Data byYCharts Here are the total returns over the last 5 years, which includes the dividends these companies pay. Overall, not a terrible performance from these top positions. At least, the top positions at this point. Data byYCharts Despite the unique exposure here, it just hasn't translated into solid results for IDE up to this point. The fund almost seems too diverse, but at the same time, not diverse enough to help itself. It is diverse within the focus of infrastructure, industrials and materials. They have those bases covered and even include utilities which can often be lumped with infrastructure. However, this buckshot approach resulted in mediocre results. At the same time, if they had just been even more diversified into something that mirrored SPY, it would have resulted in better performance. Which is easy to say in hindsight, to be fair. Conclusion IDE is diversified within the parameters of infrastructure, industrial and material stocks. However, it overall isn't a diversified fund in the context of something that could be even somewhat comparable to SPY. That type of exposure and international positioning has hurt this fund. If the short run in 2022 is any indication, it could provide shelter for investors. The value-oriented portfolio has been where capital has been flowing to. In my opinion, I almost wish they were more focused on industrial and materials. Drop the infrastructure/utility angle and really set themselves apart from other funds. Overall, I think the strongest selling point is the deeper discount at this time. The current environment should even lend well to its current investment holdings. This isn't a set-and-forget type of holding and should probably be actively watched if one wants to invest. ====================