A Positive Move From Equus II Fund (CEF: EQS)

by: CEFblog posted on: February 21, 2006 | about stocks: EQS

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Equus II (EQS) reported in late January that they had sold Champion Window Holdings to an investor group at a large profit, and then only a week later announced a big dividend would be paid to shareholders. The $2.50 dividend was over 25% of the fund’s market price at the time of the announcement.

I still wouldn’t buy shares in this fund because its expense ratio is very high, and its long-term performance has not been impressive. But it is a good sign that the management of Equus II was willing to distribute this much cash to shareholders so quickly following the sale of one of their holdings.

When a fund is trading near a 25% discount, it is difficult to deliver returns that would be better than just returning money to shareholders. The management of Equus II should continue to do this at every opportunity they get.

EQS 1-yr chart:

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