AOD - AOD: Long-Term Performance Problems But A Decent Dividend Fund

2024-04-02 13:19:29 ET

Summary

• The abrdn Total Dynamic Dividend Fund offers a yield of 8.38%, which compares well to similar closed-end funds.
• The AOD closed-end fund has underperformed global equity indices but has shown consistent performance under abrdn's management.
• The AOD fund's distribution history has been consistent, and it currently trades at a discount to its net asset value, making it an attractive option for income-focused investors.
• The fund's largest position is lagging the market and it has a number of large positions with very low dividend yields, which is reducing the income that it earns.
• The fund has failed to cover its distribution over its two most recent fiscal years, but it is doing okay right now.

The abrdn Total Dynamic Dividend Fund ( AOD ) is a closed-end equity fund, or CEF, that investors have long used as a way to obtain a sizable level of income from the assets in their portfolios. The fund does reasonably well here, as it currently boasts an 8.38% yield, which generally compares fairly well to that of many similar closed-end funds. Morningstar classifies the abrdn Total Dynamic Dividend Fund as an "Equity-Global Equity" fund, so we can use that to establish a peer group for this fund. Here is how its yield compares to that of other funds with a similar classification:

Admittedly, the abrdn Total Dynamic Dividend Fund does not have the highest yield on this chart. However, any time that we see a fund whose yield is substantially out of line with its peers, it could be a sign that the market believes that the distribution is unsustainable or that the fund is having some problems. That may be the case with the Clough Global Equity Fund, and indeed that fund manager is often the target of some very harsh criticism from the investment community. For the most part, what we see here is that the abrdn Total Dynamic Dividend Fund compares fairly well with its peers, so it seems to have the confidence of the market as well as the potential to serve as a significant source of income for a yield-hungry investor....

For further details see: