Abrdn Total Dynamic Dividend Fund (AOD) Stock

PHILADELPHIA, PA / ACCESSWIRE / August 29, 2024 / The Board of Trustees of abrdn Total Dynamic Dividend Fund (NYSE:AOD) ("AOD"), announces that shareholders of First Trust Specialty Finance and Financial Opportunities Fund (NYSE:FGB) ("FGB"), advised by First Trust Advisors L.P., did not attain a 1940 Act quorum at its adjourned special meeting of shareholders on August 29, 2024 and therefore there were insufficient votes to pass the proposed reorganization proposal.

AOD offers high yield income with a 70% increase in the monthly distribution and shift to managed distribution policy based on 12% of NAV each month. AOD fund is managed by abrdn with top sectors in Information Technology, Financials, Health Care, and Consumer Discretionary. Recent increase in AOD distribution aimed at closing discount, presumably placating activist investor Saba Capital Management.

The abrdn Total Dynamic Dividend Fund offers income-focused investors exposure to common equity securities for potential inflation protection. The fund's 8.15% yield is competitive, and its performance has been reasonable, outperforming some benchmarks on a total return basis. The fund claims to be focused on dividend income, but many of its positions do not have much of a yield.

The abrdn Total Dynamic Dividend Fund offers a yield of 8.38%, which compares well to similar closed-end funds. The AOD closed-end fund has underperformed global equity indices but has shown consistent performance under abrdn's management. The AOD fund's distribution history has been consistent, and it currently trades at a discount to its net asset value, making it an attractive option for income-focused investors.

abrdn Total Dynamic Dividend Fund has performed well, returning 11.2% in total returns on market price since my last article. Compared to passive ETFs, the AOD fund has lagged. In fact, the AOD fund lags on average 150-250 bps every year. While AOD's 8.6% distribution yield looks attractive, investors can easily create a superior distribution stream using low-cost passive ETFs and fixed withdrawals.

abrdn Total Dynamic Dividend Fund is set to benefit from a potential year-end rally in equities, after being down more than -13% since our Sell rating. AOD is moving from a Sell to Hold rating due to its potential for positive momentum and attractive seasonality factors, with the original factors driving the Sell rating now dissipated. AOD is set to merge with First Trust Special Finance and Financial Opportunities Fund, creating a larger fund with increased assets under management.

The abrdn Total Dynamic Dividend Fund offers a high level of income with a current yield of 9.20%, surpassing major indices and fixed-income options. The fund's performance has been underwhelming compared to the S&P 500 Index, but its distribution payments improve its overall returns. The fund's strategy of investing in dividend-paying common stocks may not generate sufficient income, but its leverage ratio is low and it provides diversification with unique holdings.

AOD: Time To Take Some Profits On This CEF

Liberty All-Star Equity, BlackRock Science and Technology Trust, and abrdn Total Dynamic Dividend are large, liquid, and reasonably priced closed-end funds with high yields and minimal leverage. All three funds focus on diversified portfolios across various sectors and market segments, aiming for long-term capital appreciation and regular income generation. While all three funds have exposure to leading tech stocks, they are not as top-heavy as the S&P 500 index, offering stability and the ability to capitalize on a broadening market leadership.