MCN - MCN: Valuation Better But Not Great
2024-05-12 20:48:20 ET
Summary
- Madison Covered Call and Equity Strategy Fund has seen a decrease in its premium since our last update.
- MCN's portfolio has shifted towards a value-oriented approach, with healthcare, financials, and energy as the most significant allocations after its sizeable cash holding.
- The fund's valuation is looking better these days, but I believe some call-writing alternatives present more compelling options in today's market.
Written by Nick Ackerman, co-produced by Stanford Chemist.
Madison Covered Call and Equity Strategy Fund ( MCN ) provides exactly as its name implies: an equity portfolio while employing a covered call strategy overlay. The fund had been trading at a fairly elevated premium the last time we covered it , but it has come down to trade near parity with its net asset value per share more recently. That was partially responsible for the resulting weak performance of the fund since our last update.
MCN Performance Since Prior Update (Seeking Alpha)
In terms of total returns, investors would have actually lost money, while the S&P 500 Index delivered a strong ~28% return. With a better entry valuation, it's looking like a more interesting opportunity today....
MCN: Valuation Better, But Not Great