URTH - EXG: Decent 8%-Yielder But Historic Performance Prevents Rating Upgrade

2024-02-21 13:38:52 ET

Summary

• Eaton Vance Tax-Managed Global Diversified Equity Income Fund offers high income from equity securities without sacrificing upside potential. The fund also provides decent exposure to foreign equity markets.
• The EXG closed-end fund's performance has not matched that of the S&P 500 Index or MSCI World Index even when distributions are included.
• The fund's distribution yield is higher than comparable equity indices, but its distribution history shows a trend of reducing payouts.
• The fund fully covered its 8.3% yield during the most recent full-year period and will probably be able to do so again if the market maintains its current strength.
• The fund is trading at a double-digit discount so the current price is very reasonable.

The Eaton Vance Tax-Managed Global Diversified Equity Income Fund ( EXG ) is a closed-end fund, or CEF, that investors can employ as a method of earning a high level of income from the assets in their portfolios. The fund is one of the few that is currently available on the market that manages to pay out a very high yield while investing primarily in equity securities and therefore allowing its investors to earn a high level of income without sacrificing the much greater upside potential of equity securities when compared to fixed-income assets. As many regular readers may recall, many of the income-focused funds that we have discussed in this column over the years focus their efforts on investing in fixed-income securities. This is due to the much higher yields that are available in the fixed-income market compared to the stock market today. We can see this here:

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