2024-02-20 04:44:08 ET
Summary
- The Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund provides high income and exposure to foreign companies.
- The fund's current yield of 6.74% is better than most equity indices, although it is considerably lower than many other closed-end funds.
- ETO's recent performance has slightly underperformed the S&P 500 Index but outperformed the MSCI World Index.
- The fund should not be as exposed to interest rates as a fixed-income fund, but it still has high exposure to long-duration technology stocks.
- ETO appears to be fully covering its distribution and trades at a reasonably attractive distribution.
The Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund ( ETO ) is a closed-end fund that can be employed by those investors who are looking to obtain a very high level of income without sacrificing the upside potential that can be obtained by investing in common equity securities. As the name of the fund indicates, the fund also provides some much-needed exposure to foreign companies. In various previous articles, I have pointed out that many American investors do not have sufficient foreign exposure to achieve proper diversification, so the fund could be appealing to those who wish to improve their international diversification. Unfortunately, the fund's current 6.74% yield is pretty low for a closed-end fund, but it is still better than most equity indices right now. After all, the S&P 500 Index ( SPY ) only has a 1.33% trailing yield, and even the MSCI World Index ( URTH ), which includes higher-yielding foreign securities, only yields 1.56% at the current level. The Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund might therefore be a reasonable alternative for those looking for equity exposure that desire something better than the 5% available from a money market fund.
As regular readers might recall, we last discussed the Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund in early December 2023. Both domestic and foreign stock markets have generally been fairly strong since that time, so we would probably expect that the shares of the fund delivered a very respectable performance since that article was published. This is indeed the case, as the fund's share price is up 6.95% since that article was published. This is decent, but it is worse than either the S&P 500 Index or the MSCI World Index delivered over the same period:
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For further details see:
ETO: Maintaining Rating, But This Global CEF Is Improving