Q: I want to increase my energy holdings in the current market. Currently ENCC’s yield is around 14% due to selling covered calls. How do you anticipate that it will fare in the next few years?
Thank you for your excellent service.
Geoff
Thank you for your excellent service.
Geoff
5i Research Answer:
The fund has a very solid 5-year performance number (coming off covid lows). Performance will still be closely tied to the energy sector, with some variability due to stock volatility which will impact option premiums. The sector remains very cheap, but of course is always cyclical. Three year performance is 9.14%, and we would expect something similiar, in the 9% to 10% range, with a higher yield offset a bit by some NAV decay.