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Lipper Closed-End Fund Summary: October 2015

By Tom Roseen For the first month in seven equity and fixed income CEFs posted plus-side performance on average on both a NAV basis (+5.97% and +1.07%, respectively for October) and market basis (+7.50% and +3.41%). Year to date equity CEFs remained in the red for the fourth straight month, down 4.41%, while fixed income CEFs moved more solidly into the black, returning 1.54% on average on a NAV basis for the same period. For the month many of the major broad-based indices chalked up their best one-month return since October 2011, with the Dow Jones Industrial Average Price Only Index and the S&P 500 Composite Price Only Index returning 8.47% and 8.30%, respectively. Beleaguered Shanghai Price Only Composite and Xetra DAX posted a couple of the strongest returns in the global markets, returning 11.50% and 11.15%, respectively, for October as investors cheered easy-money news from both the Peoples Bank of China (PBOC) and the European Central Bank (ECB). Despite a weaker-than-expected jobs report at the beginning of the month, mixed economic data throughout the month, and a roller-coaster ride of corporate earnings reports, volatility-as measured by the CBOE Volatility Index (VIX)-fell 38% over the month to 15, remaining below the long-term average of 20. Investors appeared to shrug off a disappointing nonfarm payrolls report that showed the U.S. had added a lower-than-expected 142,000 jobs for September-below the consensus-expected 200,000-as investors perhaps realized the Federal Open Market Committee was probably not going to raise interest rates this year. As commodity prices rallied mid-month, the S&P 500 posted is strongest weekly gain for 2015. And while the Fed minutes’ discussing global risks kept the hawks in check, many felt the downside risk was on the mend. Ignoring a slight decline in industrial production for September, consumer sentiment rose in October for the first month in four. A surprise cut in interest rates by the PBOC, better-than expected earnings reports from a few heavyweight tech firms (Amazon (NASDAQ: AMZN ), Microsoft (NASDAQ: MSFT ), and Alphabet (NASDAQ: GOOG )), and hints from the ECB that further easing might be in the cards pushed stocks to a fourth consecutive week of plus-side performance and sent investors into risker assets for the month and out of some recently popular safe-haven plays. Battered energy stocks got a shot in the arm with the rise in commodity prices and on news the central bank in the second largest economy in the world had cut interest rates, sending Lipper’s domestic equity CEFs macro-group (+6.48%) to the top of the equity CEFs universe for the first month since August 2014. World equity CEFs (+5.46%) and mixed-asset CEFs (+5.03%) also fared well during the month. Treasury yields rose at all maturity levels along the curve after the Fed left the door open for possible rate increases later this year, with the largest increase witnessed in the six-month yield and the five-year yield, 15 bps each to 0.23% and 1.52%, respectively. For the first month in four all three fixed income CEF macro-groups posted plus-side returns, with world bond CEFs (+3.29%) leading the way, followed by domestic taxable bond CEFs (+1.19%) and municipal bond CEFs (+0.68%) as investors put some risk back in their portfolios. For October the median discount of all CEFs narrowed 157 bps to 9.58%-slightly worse than the 12-month moving average discount (9.50%). Equity CEFs’ median discount narrowed 91 bps to 11.29%, while fixed income CEFs’ median discount narrowed 160 bps to 8.41%. For the month 82% of all funds’ discounts or premiums improved, while 16% worsened.

The Global X FTSE Portugal 20 ETF: The Case Of The Double Edged Sword

Portugal may have decided to end its EU support too soon. The domestic corporate structure is too diversified, involving many holding companies. The private banking system has remained weakened by a 2014 default. For Europe’s smaller economies, European Union membership, as well as adopting the Euro has been a double edged sword. The idea was for commerce to have the same ease of access similar to the United States of America. Imagine, if you will, what it would be like if goods in Pennsylvania had to make border stops, use passports or visas and pay tariffs as they crossed the New Jersey, then New York, then Connecticut state’s borders! It’s difficult to imagine, but that’s essentially how European nations conducted cross border business before the EEC. Without those ‘technical, legal and bureaucratic barriers’, smaller European economies, such as Portugal, not only had an unimaginably large market for its products, but now had a new employment opportunities for its citizens as well as the potential to expand its manufacturing and financial services base. The ‘icing on the EU cake’ was being able to do away with unstable legacy currencies and adopt the Euro, further leveling the playing field. Indeed, the EU economy expanded pulling along the smaller economies but at an unsustainable rate. When the global credit market collapsed in 2008, the other edge of the sword cut smaller economies to pieces, causing a deep recession, high unemployment and unsustainable debt to GDP ratios, literally putting many governments on the edge of bankruptcy. Since then, the EU has had a slow, uneven recovery. However, having the support of the larger community, many smaller economies have pulled back from the brink of disaster. This is the point: is this the right time to establish a position in the smaller EU economies, such as Portugal? If the investor wished to, there seems to be one available ETF: the Global X FTSE Portugal 20 ETF (NYSEARCA: PGAL ) . The premise for risking your hard earned savings is based on the old Wall Street premise to ” buy low and sell high .” The question is whether the worst is over for Portugal and what the potential is, versus the risk. If a picture is worth a thousand words, the potential for capital appreciation might be interpreted by the fund’s chart since inception in November of 2013. (click to enlarge) The fund closed its first day of trading at $15.05. Within four months the ETF gained 22.8%. At that time, the entire EU economy was struggling with deflation. At the June meeting, ECB President Draghi imposed negative interest rates. Portugal was experiencing a nascent recovery. Portugal’s sovereigns had also recovered. Now able to finance the government on its own to meet its budget the government passed on a scheduled final EU bailout tranche. German Finance Minister Wolfgang Schaeuble noted that: Portugal is now managing without European aid and can stand on its own two feet. That’s a big success. However, within months, a subsidiary of one of Portugal’s major financial institutions missed a debt repayment. Banco Espirito Santo ( OTCPK:BKESY ) , the parent company, had its shares suspended from trading. The Portuguese stock market fell sharply. The default put the entire Portuguese banking system into question. This is an important issue to understand before investing in Portugal through the fund. However, Portugal’s economic stability goes further than the banks. It’s worth examining the fund’s holdings. First, it’s difficult to separate the fund into sectors. For example although classified as a Telecommunications services company, Sonacom (OTC: OTC:SOVTY ) also provides IT services with software and system information services. Sonae Capital (OTC: OTC:SGPMY ) is listed separately as a Consumer Discretionary company and also as a Consumer non-cyclical. Sonae is in the Hospitality and Recreation industry as well as retail food services, superstores, supermarkets, and drug stores. The Sonae brands fall under the management of one holding company. On a larger scale this is not out of the ordinary. However, this seems typical in Portugal’s small economy. Consumer non-cyclical and Discretionary Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business Jeronimo Martins OTCPK:JRONY $7.520 1.86% NA 26.97 13.38 23.84 Retail food, distribution; supermarkets, drug stores. Portugal and Poland Sonae SGPMY $2.00 3.30% 38.03 11.46 6.04 61.62 Retail food; superstores, supermarkets, franchise outlets; sporting goods, fashion and electronics Sonae Capital SGPMY $0.101 0.00% 0.00% 150 6.49 42.82 Tourism and Hospitality; resorts, marina, catering, fitness and golf courses Second, the quality of the Financial Services metrics indicates the underlying weakness in the sector. It was difficult to determine any metrics of Banif Banco Internacion do Fuchal (Lisbon: Banif) as it is a privately held company. The bank provides a broad range of banking services from retail to corporate, as well as asset management and insurance. Another of the holdings is Banco Espirto Santo ( OTCPK:BKESF ) , the bank which triggered Portugal’s banking crises shortly after the government had successfully restored its credibility in the sovereign debt market. Financial Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business Banco BPI OTCPK:BBSPY $1.46 0.00% 0.00% 82.27 9.54 57.63 Banking Services; corporate, institutional, retail, insurance, credit cards. Subsidiaries in Angola and Mozambique Banco Commercial Portugues OTCPK:BPCGY $2.85 0.00% 0.00% 67.95 11.94 149.69 Privately owned; financial services; asset management, mortgages, consumer credit, insurance Banco Espirito Santo Lisbon: BES $0.613 0.00 0.00 NA NA 237.84 Domestic, corporate and retail banking; credit cards, debit cards, savings accounts, management and insurance One bright spot is the Utilities sector, two of the holdings having respectable yields and one of those has a sustainable payout ratio. Utility Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business Energias de Portugal OTC:ELCPF $9.64 5.39% 17.64% of cash flow 11.69 3.62 225.55 Electric and gas in Portugal and Spain Renovaveis OTC:EDRVF $5.22 0.61% 47.56% 34.57 7.25 81.00 Spain based; renewable energy; hydro, wind, solar, tidal and biomass; EU, Brazil, Canada and US Redes Energeticas Naciona OTC:RENZF $0.810 6.14% 14.6% of cash flow 9.52 2.47 206.08 High voltage transmission; electricity; natural gas transmission and storage Portugal’s Basic Materials is concentrated in cements and cement related products. What is a very interesting feature of Portugal’s industrial Sector is its presence in Africa as well as South America, particularly in Brazil. On one hand this is a ‘plus’ as these companies provide their services in regions with a high growth potential like Egypt and South Africa. On the other had the investments in Brazil presents a problem for the fund as Brazil’s economy has recently been brought to a halt, along with a sharp currency devaluation, because of the collapse of commodity prices as well as a political scandal. Basic Materials Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business Portucel Lisbon: PTI $2.68 11.26% 104.94 14.42 9.26 47.89 Paper pulp, craft pulp Cimpor-Cimentos De Portugal OTC:CDPGY $0.320 0.55% nil 17.10 1.58 503.71 Cement and aggregate (clinker); ready-mix; Portugal, Egypt, Cape Verde, Angola, Mozembique, South Africa, Brazil, Argentina and Paraguay The Telecom Services are run-of-the-mill as far as the Telecom Sectors go. However it does present another example which lends to the confusion of how some holdings should be classified. Pharol (OTC: OTCPK:PTGCY ) is described as a ‘capital management company’ with a 27% holding interest in Brazilian Telecom Oi (Brazil: OIBR4) . Pharol seems to be more of a hedge fund specializing in the Telecommunications Services Sector, while also investing in other holding companies. Telecom Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business NOS SGPS OTCPK:ZONMY $3.53 1.86% 72.07% 45.12 8.81 98.06 Cable, Satellite, movies, series sports and children programming, mobile and landline voice, data Pharol SGPS PTGCY $0.338 24.10% NA NA NA 0.00 Capital management of Brazilian and Portuguese Telecoms Sonacom SOVTY $0.598 2.13% 30% of cash flow 14.15 12.63 0.94 Telecom mobile and landline; voice, data, television; also some IT software and system information Portugal’s industrials are focused on paper-pulp manufacturing. There are three paper-pulp manufactures in the fund, two of which fit into the Industrials Sector and one in Materials. There’s one major construction company, Mota Engil (OTC: OTC:MTELY ) providing engineering and construction including transportation infrastructure and then managing those projects after completion. Industrials Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business Correios de Portugal OTC:CTTPY $1.295 4.89% NA 18.95 14.70 0.57 Courier services, parcel delivery; financial services, transfers, money orders, digital mail Altri SGPS OTC:ASGSY $0.890 1.68% 74% of cash flow 9.87 6.56 192.25 Paper pulp; generates electricity from waste biomass Semapa-Sociedade de Investimento e Gestao OTC:SEMMY $0.967 2.88% 40.50 14.29 3.18 NA Paper pulp, cement, pre-casts, recycling of cooking oil. Tunisia, Angola, Poland, France Mota Engil SGPS OTC:MTELY $0.445 5.02% 12.8% of cash flow 15.26 2.50 485.19 Engineering, Construction; Environment and Transportation construction and management Lastly, there’s one position in the energy sector, a holding company, GALP Energia (OTC: OTC:GLPEF ) . Galp Energia produces, refines and markets gasoline and petroleum products. Another segment provides oil exploration services in 40 countries. Energy Symbol Market Cap (USD Billions) Yield Payout Ratio P/E Price to Cash flow Total Debt to Equity Primary Business GALP Energia GLPEF $7.06 3.78% N/A N/A 12.74 65.61 Holding Company, energy exploration, production As far as the fund metrics, management fees total 0.61% compared to the industry average of 0.44%. It’s a small fund with about $37.5 million in net assets. Since its November 2013 inception its cumulative return is -26.85% and an average annualized return of -14.70%. The price to earnings for 2015 is 15.37 and price to book 1.35. When referring back to the price history chart, it looks like the fund might be a really good opportunity for a capital appreciation investment. However, upon closer inspection, it was really too far out in front of its potential when it reached its all-time high of $18.48. Further, the private banking sector really needed a restructuring before the government ended the EU restructuring program, as Portugal’s domestic banking crises demonstrates. Some events of the banking crisis are noted on the chart. The price earnings ratio of the holdings weren’t all that bad. Excluding from the count any holding for which the data wasn’t available, and any extreme numbers, it averaged out to 26.20 which doesn’t seem too bad. However, many holdings would not be marginable in US equities markets, in particular, being priced below $5.00 per share. This raises another point. The combination of a low P/E and a low stock price may be an indication of ‘fair value’. Hence, the fund may be close to fair value at this level. It’s unlikely that Portugal’s economy can generate enough investment interest in the foreseeable future in order for the fund to work its way back to the 2014 high. On the bright side, this is a situation where the EU benefits the smaller economies, as it’s a potential safety net for the economy, if it’s necessary. In the current situation, Portugal is now attempting to restructure a weak banking system without direct EU support. An analogy may be made here between Portugal’s economy and the Greek economy. They are in similar straits; however the Greek government has (with difficulties) stuck with the EU bailout program. Portugal may have to reestablish its commitment to the EU restructuring plan. This would be a good fund to ‘bookmark’, and follow the news and events; however, it might not be the right time to establish a position.

The iShares MSCI Netherlands ETF: A Dutch Treat?

The fund heavily weights Netherlands’ premier global companies. The fund has a consistent positive total returns over its 19 year existence. The main drag on the fund might be due to the strong US Dollar and weak Euro. There’s nothing like getting away to a warm place in the dead of winter. Oh, the idea of heading south to the Caribbean to escape the slush, ice and snarled traffic. Perhaps, Aruba, Curaçao or Sint Maarten? On the other hand, you might get a puzzled look from your co-workers while they’re bundling up for their wintery trek home by announcing that you’re off to the Netherlands for holiday. The fact is you’re actually being quite accurate! Those aforementioned mentioned timeless, carefree, warm, sunny islands are actually autonomously governed members of the Kingdom of Netherlands . The country in northern Europe which might have first come to mind, Netherlands, is actually a forth constituent member of the Kingdom of Netherlands . The Kingdom’s reach doesn’t end there, either! Three other Caribbean islands Bonaire, Sint Eustatius and Saba are special municipalities and its citizens actually have voting rights in Dutch and European election! There’re two details that often confuse people: what’s the difference between Netherlands and Holland ; and who are the people of Netherlands? First, Holland is located in the central region of Netherlands. Second, the people of Netherlands are Dutch ! To put this in perspective, the beautiful cities of Amsterdam, Rotterdam, the Hague, Delft, Leiden and Haarlem are located in Holland, which is in Netherlands. Lastly, Netherlands is governed by a constitutional monarchy, with a bicameral parliament. The monarchy isn’t just a formality, either! King Willem-Alexander actively mediates in Dutch parliamentary politics. At this point there’s a good chance that Netherlands suddenly seems like an interesting place. You might even be asking yourself whether it’s a worthwhile investment. If that is indeed the case, there’s a way you can invest your ‘dollars’ in Netherlands through the BlackRock’s (NYSE: BLK ) iShares MSCI Netherlands ETF (NYSEARCA: EWN ) . According to BlackRock … The iShares (NYSE: MSCI ) Netherlands ETF seeks to track the investment results of a broad-based index composed of Dutch equities. .. The underlying index is Morgan Stanley Capital International’s ( MSCI ) Netherlands Investible Market Index . According to MSCI this index … is designed to measure the performance of the large, mid and small cap segments of the Netherlands market. With 47 constituents, the index covers approximately 99% of the free float-adjusted market capitalization in Netherlands… Although the complete list of holdings and weightings are proprietary information, does indicate the index sector allocation and it is charted below for comparison with the fund’s sector allocation. Data from MSCI The fund’s sector allocations are demonstrated in the pie chart below, and seem to emulate the index quite closely. Data from iShares This fund, like many of the iShares focused funds, has been long established having been incepted in 1996. The fund’s net assets total $169,880,091.00 in US Dollars. It should be noted here that Netherlands is a member of the European Union as well as a Eurozone member; hence the currency of Netherlands is the Euro. This is an important point. Without getting too sidetracked, it suffices to say that it’s likely that the US Dollar will strengthen against the Euro within the next few quarters. This means that the values of individual holdings will decline in dollar terms, even if the individual companies are doing well. This shouldn’t put off the long term investor, but its good practice to be aware of the currency risks, at least in the near term. The fund has 6.8 million shares outstanding, is marginable and has a reasonably good 20 day average volume of over 77,000 shares per trading session. The fund is passively managed and management fees are slight higher than the industry average 0.44%, totaling 0.48%. The present annualized yield is given as 2.47% and the fund is currently trading at a 0.48% premium to NAV. The fund’s P/E ratio is given as 23.64% and a price to book value multiple of 2.14. The total number of holding is 48, which includes a small cash/derivatives holding. A quick overview of the major holdings with some key metrics, in order of sector weightings is presented below, starting with Consumer Staples. Although there are several ways to measure a company’s financial stability, the ‘Quick Ratio’ is included when available. In brief, Investopedia defines the ” Quick Ratio ” as … an indicator of a company’s short-term liquidity… …a company’s ability to meet its short-term obligations with its most liquid assets … … a quick ratio of 1.5 means that a company has $1.50 of liquid assets available to cover each $1 of current liabilities… Ah! Before continuing, please note that you will often see the Dutch word ” Koninklijke” preceding the company name or brand. It’s equivalent to “Royal Dutch”, like in ‘ Royal Dutch Shell ‘ (NYSE: RDS.A ) Consumer Staples 32.0171% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business Unilever UL 19.074% 3.05% 41.40% $131.00 0.47 Personal care, foods, refreshments, home care with 400 brand names. Services over 190 countries globally. On par with other global giants, Nestles (OTC: OTCPK:NSRGF ), Proctor and Gamble (NYSE: PG ) and the like. Heineken OTCQX:HEINY 5.439% 1.49% 33.42% $52.321 0.55 Beer brewing with over 50 brand names and global distribution in 75 countries Koninklijke Ahold OTCQX:AHODF 4.7393% 2.50% 50.53% of EPS $14.54 0.65 Food retail brands and Supermarkets in the USA New England area, Netherlands, and Czech Republic; total stores number, approximately, 3200 Heineken Holdings OTCQX:HKHHF 2.0859 1.62% 33.33% $19.11 0.55 Holding 50.005% of Heineken; the holding company segments and manages the Heineken brands by geographical region. There are in addition, three smaller Consumer Staple holdings accounting for 0.6789% of the fund’s total holdings. They are Corbion ( OTCPK:CSNVY ) , 0.3648% of the fund, providing bio-based food additives, emulsifiers, frozen doughs and vitamin premixes; Koninklijke Wessanen ( OTC:KJWNF ) at 0.2069%, which manufactures and markets organic food products, spreads, honeys, cereals, and dietary solutions; Amsterdam Commodities ( OTC:ACNFF ) at 0.1072%, which trades, transports and distributes agricultural products. All three companies contribute to the fund’s overall dividend. There are 9 financial holdings. The smaller holdings: Wereldhave ( OTC:WRDEF ) at 0.6159%; Eurocommercial Properties (Amsterdam: SIPFC) 0.5529% ; Vastned Retail REIT ( OTC:VSNDF ) 0.231%; NSI ( OTCPK:NIUWF ) 0.1405%, all totaling 1.3998% of the fund’s total holdings, are REITS. Delta Lloyd ( OTCPK:DLLLY ) 0.4364% and Binckbank ( OTC:BINCY ) 0.1274% provide traditional banking services, annuities, manage pension funds and online banking. All of the above contribute to the fund’s overall dividends. The lion’s share of financial holdings, at 19.2501%, is summarized below. Financials 21.3515% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business ING Group ING 14.3798% 2.18% 35.20% $48.335 NA A global player in banking, providing global retail service, investing, insurance as well as commercial service Aegon AEG 2.8773% 4.10% 63.78% $11.42% NA Insurance, pension management, Europe, North, Central and South Americas, U.K.; Expanding into Central and Eastern Europe and Asia NN Group OTC:NNGPF 1.9903% 3.49% NA $9.17 NA Insurance, investment management, annuities, reinsurance. Europe and Asia The fund holds 13 industrials, however, the top four account for over 10% of the fund’s holdings and well over 75% of the total industrial holdings. Industrial 13.6886% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business Koninklijke Philips PHG 6.5413% 3.28% 154.09% $23.81 0.86 Called ‘Philips’ in the US: Imaging systems, diagnostic imaging, x-ray equipment. Consumer lighting, appliances personal care products. Randstad Holdings OTCPK:RANJY 1.9134% 2.39% 56.95% $8.963 NA Staffing service, temporary and permanent, payroll services, outplacement, and workforce solutions. Koninklijke Baskalis Westminster OTC:KKWFF 1.0719% 3.60% 27.42% $5.09 0.37 Dredging and earthmoving, maritime infrastructure; management of oil and gas terminals TNT Express OTCPK:TNTEF 1.0647% 1.04% NA $3.827 1.20 Express carrier for documents, parcels and freight. Offices in 60 countries with a delivery reach in 200 countries globally Four companies comprise the Information Technology allocation. The topmost are most significant ASML (AMSL) and Gemalto ( GTOFF) accounting for 9.8634% of the fund and over 90% of the IT holdings. The smaller holdings are ASM International, (ASMIY) at 0.5154%, a manufacturer of wafer processing equipment and BE Semiconductor ( OTC:BESVF ) at 0.1657%, a manufacturer of semiconductor back-end and packaging equipment. All four holdings pay dividends. Information Technology 10.5445% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business ASML Holdings ASML 8.5177% 0.79% 21.65% $41.945 1.77 Semiconductor lithography systems for integrated device manufacturing, flash and DRAM memory. Gemalto GTOFF 1.3457% 0.69% 19.53% of EPS $4.897 1.20 Digital security: mobile, machine to machine, transactions There are three significant holdings for the Consumer Discretionary and two smaller holdings. The smaller holdings are TomTom (TOMAF) , the well-known navigation equipment manufacturer, at 0.2914% and Accell Group ( OTCPK:ACGPF ) at 0.1167% of the fund, manufactures exercise equipment, particularly bicycles and bicycle components. Consumer Discretionary Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business Relx RELX 4.5121% 2.62% 65.37% $17.592 NA Information Solutions for science, medical and technical for professionals and students Wolters Kluwer OTCPK:WTKWY 2.7013% 1.68% 48.17% $8.73 0.69 Information software and services legal, business, accounting, medical and healthcare Altice (classes A and B) OTC:ALLVF 2.1537% 0.00% 0.00% $15.92 0.56 Media provider and services, cable TV, broadband internet, telephony Only four companies comprise the Materials Sector holdings, the two most significant are Akzo ( OTCQX:AKZOF ) and Koninklijke DSM ( OTC:KDSKF ) . The two smaller holdings are OCI ( OTCQX:OCINY ) 0.5894% which seems to be as much an industrial by way of its infrastructure construction and project management as well as manufacturing materials, particularly fertilizers. It is a subsidiary of Orascom Construction (Cairo: OCIC) . The second is Koninklijke Ten Cate ( OTC:KNKCF ) 0.1908% manufactures advanced textiles and composite materials. Materials 7.71% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business Akzo Nobel AKZOF 4.4598% 2.24% 36.27% $14.74 0.90 Paints, coatings, specialty chemicals, marine coatings, metal coatings, vehicle finishes. Also food additives, detergents, cosmetics. Koninklijke DSM KDSKF 2.47% 3.32% 366% of EPS $8.21 0.97 Nutrition, vitamins and nutrients, carotenoids. Also performance materials plastics, resins, polymer materials There’s only one telecom holding, Koninklijke KPN (OTC: OTC:KKPNF ) at 2.9527%. KPN has a $12.61 billion market cap and pays a 3.51% dividend. The company is pretty much a broad based telecom service provider whose primary business is integrated information and communication technology for mobile, residential and business. The least weighted sector is in energy with three holdings each has a weighting of less than one percent. Energy 1.7472% Exchange and Symbol Fund Weighting Dividend Yield Payout Ratio Market Capitalization (in USD Billions) Quick Ratio Primary business Vopak VOPLY 0.7454% 2.29% 43.5% of EPS $4.57 NA Storage of oil products, liquid chemicals, bio-fuels and vegetable oils as well as shipping terminal to terminal. SBMO OTCPK:SBFFF 0.6601% 0.00% 0.00% $2.52 2.02 Offshore energy, floating production and mooring systems, terminals and service Fugro OTCPK:FURGF 0.3417% 0.00% 0.00% $1.37% 1.49 Geotechnical Interpretation services providing information of the Earth’s surface and subsurface. Geosciences and Surveys for the oil and gas industry The fund has a respectable track record, with a consistent distribution as well as positive annual returns since inception, the only exception to that is the -1.59% negative return over the past 52 weeks. Since inception the fund has a total return of 4.98%; over the past ten years, 4.74%; five years, 4.98% and three years, 9.98%. Hence, the fund has a pretty consistent positive return, over different time frames, over the life of the fund, with the exception of the past year. (click to enlarge) The fund has several real global heavy-weight champs with distribution in the world’s best performing economies, like the USA, the U.K. and Germany. Further, the fund is smartly structured to top-weight these premier companies. Hence, it’s not unreasonable to assume that the poor performance over the past year may be currency related , particularly when it comes to US Dollar strength combined with Euro weakness. Should the US Fed raise its benchmark rate, or the ECB weaken the Euro in the coming months this might present an excellent buying opportunity for the investor with a long term outlook.