g451252772ea@ucdavis.UUCP (g451252772ea) (01/31/86)
(This refers to earlier msgs, but the 'f' reply didn't work as stated...) Thanks for your lengthy reply. That was precisely the kind of historical information I sought re/Prudential. Actually Equitilink is the advisor, about which I know nothing. The fund is listed, as promised, on the American Exchange. I failed to find it when I first looked, probably at a December listing. | The disadvantage of an open ended fund is that the fund must buy and | sell stocks as people buy or redeem shares of the fund. This may | cause the fund to spend more on brokerage commissions it would if it | were closed ended. Additionally, if the fund deals in thinly traded | stocks, it may be forced to buy or sell at times when it is unable to | get a good price. As far as I know there is no evidence that closed | end funds outperform open ended funds in practice. Good points. I'd not seen the commissions liability ever explained anywhere, in particular. However, closed funds don't underperform on average, either (and now they don't all sell at discounts, either). | What is the purpose of utilizing options? When an option is traded, | one of the partners in the trade must loose. In fact, given brokerage | commissions, both sides may loose. So the fund should have a pretty | good explanation of why they want to use options. The reason stated is to 'seek to protect the value of equity securites'. But only if 'the aggregate premium paid for all options held does not exceed 10% of the value of its net assets'. About brokerage commissions: they plan to use Bache Cortis & Carr Ltd, an Austrl. affiliate of PruBache. They require its charges to be "reasonable and fair". And they specify they'll deal generally with full-service brokers, but only use their advice as supplemental to their own research. (So why not use discounters? Doesn't Aus. have them?) | "Straddles" sound like speculation rather than investing to me. Yes, er, ah ... "The fund does not expect to trade in securities for short-term gain. It is anticipated that the annual portfolio turnover rate will not exceed 100%." Also, "The fund intends to qualify and elect to be treated as a regulated investment co. for each taxable year under the IRS code of 1954... Accordingly, the Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, and gains from the sale ... of stock or securities; (b) derive less than 30% of its gross income from the sale ... of stock or securities held less than three months; and (c) diversify..." Sounds like they're aware of constraints, anyway. Again, thanks for your comments. -Ron. (Any comments re/Sun Microsystems still welcomed, too. In particular, how does one learn when the actual offering is made, or where? Call the folk handling the announcement?) From postnews Thu Jan 30 22:29:10 1986 Thanks for your lengthy reply. That was precisely the kind of historical information I sought re/Prudential. Actually Equitilink is the advisor, about which I know nothing. The fund is listed, as promised, on the American Exchange. I failed to find it when I first looked, probably at a December listing. | The disadvantage of an open ended fund is that the fund must buy and | sell stocks as people buy or redeem shares of the fund. This may | cause the fund to spend more on brokerage commissions it would if it | were closed ended. Additionally, if the fund deals in thinly traded | stocks, it may be forced to buy or sell at times when it is unable to | get a good price. As far as I know there is no evidence that closed | end funds outperform open ended funds in practice. Good points. I'd not seen the commissions liability ever explained anywhere, in particular. However, closed funds don't underperform on average, either (and now they don't all sell at discounts, either). | What is the purpose of utilizing options? When an option is traded, | one of the partners in the trade must loose. In fact, given brokerage | commissions, both sides may loose. So the fund should have a pretty | good explanation of why they want to use options. The reason stated is to 'seek to protect the value of equity securites'. But only if 'the aggregate premium paid for all options held does not exceed 10% of the value of its net assets'. About brokerage commissions: they plan to use Bache Cortis & Carr Ltd, an Austrl. affiliate of PruBache. They require its charges to be "reasonable and fair". And they specify they'll deal generally with full-service brokers, but only use their advice as supplemental to their own research. (So why not use discounters? Doesn't Aus. have them?) | "Straddles" sound like speculation rather than investing to me. Yes, er, ah ... "The fund does not expect to trade in securities for short-term gain. It is anticipated that the annual portfolio turnover rate will not exceed 100%." Also, "The fund intends to qualify and elect to be treated as a regulated investment co. for each taxable year under the IRS code of 1954... Accordingly, the Fund must, among other things, (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, and gains from the sale ... of stock or securities; (b) derive less than 30% of its gross income from the sale ... of stock or securities held less than three months; and (c) diversify..." Sounds like they're aware of constraints, anyway. Again, thanks for your comments. -Ron. (Any comments about Sun MicroSystems still welcome. In particular, how does one determing the actual offering date? Call the sponsor?)