S&P 500 Covered Call Fund (BEP) is liquidating

The S&P 500 Covered Call Fund Inc. (ticker:BEP) has announced a liquidation date of February 2, 2010 which is almost two months earlier than the termination date of March 31, 2010 specified in the Fund’s charter. The final NAV value will be set on January 29, 2010 and all net assets will be distributed on February 2, 2010.

BEP closed today at a 8.4% premium over NAV which will be disappearing in less than two months. Its sister fund BEO is also way overpriced, but won’t be liquidating until later in 2010, probably around September.

Full Disclosure: Short BEP (hedged against other long positions).


5 responses to “S&P 500 Covered Call Fund (BEP) is liquidating

  1. Hi, thanks for the post on BEP. It’s the only explanation I could find online about why I lost my back side today. Was the 8.4% above NAV you mentioned as of today’s close?? I’m not savvy enough to calculate a fund’s NAV price. I’m wondering whether it’s better to cut my losses and get out before the dividend (if they’re planing on paying one this month), or to stay in for the liquidation. Is there a way to figure the approximate liquidation share value? Thanks!

    • Michael-

      You can get the NAV value of BEP on Yahoo Finance by entering the ticker XBEPX. After today’s price drop, the premium is about 5.8%.

      BEP went ex-dividend today, so about $1.00 of today’s drop is explained by the dividend payout which you will receive even if you sell BEP.

      It’s hard to predict the liquidation value exactly, since it depends on how the overall market does between now and the end of next month. But if I owned BEP, I would sell it now since it is still selling at a premium over current NAV.

  2. Thank you so much for the quick response! I was glad to find out today was trading ex-dividend. I appreciate your feedback.

  3. Which WordPress theme are you using?

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