The Chart For NOIEX, ‘Northern Income Equity Fund’, Will Never Look Right After The 22% Distribution.

.Anura Guruge December 2014 thumbnail

by Anura Guruge

Related posts:
1/ NOIEX: Huge 2014 distribution.

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BJBHX has decent December 2013.
Uncontrollable Infatuation With BJBHX.
I Bailed With Regret 2013.

++++ Search ‘BJBHX‘, ‘IPO‘, ‘stock‘ etc. for other related posts >>>>


Click to ENLARGE. Chart from ‘MarketWatch’.

Well it transpired exactly as I said it would in my December 4 post.

Just as I expected it caught quite a few by surprise and I am glad that my post was there to help them. It was my second most popular post of the day and I even got an e-mail thanking me for it. 

The TOTAL distribution with the MONTHLY dividend that was also rolled in was close to $3.97 — with the short- and long- capital gains coming in at $3.74.

BUT the NAV only went down $3.63 because $0.34 was how much the NAV went up because the rise in the prices of the underlying stock, Thursday, December 14 having been a bumper day (DOW up 400) for the stock market.

I still think this was not a great move. I think they, ‘Northern Trust’, will come to rue this distribution. The NOIEX chart will never look the same again. They will also get mischaracterized by the automated fund performance tracking systems. They are not geared to dealing with a 22% drop in NAV because of ex-divs.

I happened to have a rather long and interesting conversation with a Northern Trust representative on Friday morning. I had first called up Fidelity but they told me to call Northern Trust. I just wanted to check on something. What I wanted to find out was whether it was OK to just turn around and sell some of the shares we got, automatically reinvested, because of this distribution. I wanted to make sure that neither Fidelity nor Northern Trust would claim that I was selling shares without waiting 30 days or doing ‘excessive trading’. The answer is we are ‘OK’. You can go ahead and sell all or some of the shares reinvested as a result of this huge distribution without incurring the wrath of the Fund or a broker. But of course you will end up having tax consequences. I typically do not have dividends or cap. gains reinvested. I take them in cash instead. But this NOIEX distribution required special care. I decided to take it in stock to take a gamble on the NAV. Just my own personal preference.

The Northern Trust rep. and I ended up in long conversation about mutual fund investing, something I have been doing for 30 years. He asked me what other funds I dabbled in. He hadn’t heard of any of them. Yes, I dabble in little known, boutique funds that I dig out in my long and involved bouts of research. That is how I found NOIEX. I have been with NOIEX for a long time. Maybe 6 years, at least. I did reduce my holdings in it this Summer. I wanted to be aggressive and mess with some IPOs.

I am not going to do anymore portfolio rejuggling this year. Done plenty this year. Yes, if the stars are right I will, of course, play some options. That is just a compulsive hobby. December 20 is a key option expiry date. I have a number expiring today. Another set next Saturday. So I probably will be forced to write some options on Monday because I hate to see stocks without options against them.

But early next year I will spend a few hours going over NOIEX. I have always had a partner fund alongside NOIEX, a much more aggressive fund, sans monthlies, that compensates for NOIEX’s slower growth. I kind of keep them balanced. I might rebalance that. Maybe get out of NOIEX all together and use the funds to write more options! So many options.

Merry Christmas. Don’t NOIEX. You will be fine.