ETO

I think I've found a good global stock fund. I owned Jean-Marie Eveillard's First Eagle Global SGENX (formerly SoGen Global) for some years. But when Jean-Marie left and then came back after a year when the new guy resigned, I got spooked about management at First Eagle and bailed last year. I can't get back into it at Vanguard, and Vanguard's Global VHGEX has so many stocks it's almost an index.

ETO (Eaton Vance Tax-advantaged Global Dividend Opportunities Fund) looks like a good substitute for SGENX. It's closed end and trades on exchanges like an ETF except it's managed like a mutual but without constant dilution or liquidation. It has only been around for four years but has four year annualized total returns (with all dividends re-invested) of 23% through yesterday while SoGen was 13.6%, VHGEX 12.6%, and Oakmark Global OAKGX 10.5% for the same period.

 

ETO is about 20% leveraged which increases yield and volatility a bit. Read about it at http://www.etfconnect.com and http://www.morningstar.com They have an excellent mostly resource stock portfolio about 50% US and 50% non US which is a good mix. It pays ~7% annually in monthly installments and is selling at about 12% under NAV as many lightly leveraged closed-ends tend to do. I have an initial "tranche" and plan to add. It trades lightly so use limits. I bought on the recent pullback just to get a feel for it. The nice thing about SGENX over three decades was that it pulled in its horns when pullbacks looked likely, and was therefore less volatile, but in smaller quantities ETO may give the same gains potential, especially with the nice dividend. They say the dividends will be, as much as possible, favored at the 15% US tax level, so I think this might be a fund that works for either taxable or tax-deferred accounts.

By the way, my family accounts are very, very light in any stocks other than inflation beneficiaries which exist in many developing countries and in the US, Canada, and Australia. I always remind myself that even resource stocks are derivatives which depend on the skill and luck of management in addition to the market price of their resource produced. In inflationary times, sometimes just owning the resource works better.