Investment Q&A

We have nothing against UMAX, but it is different than ZWU. UMAX uses 'at the money' call options, on 50% of its portfolio. ZWU uses 'out of the money' options on a larger portion. Thus, UMAX's positions will be called away much more frequently, and will have to be re-established. With only half the portfolio generating call income, and constant turnover, it may not go up as much as a fund with 'out of the money' options on more of the portfolio. Its decline 'may' be less in the short term, but only to the exent of the the different in premiums on 'at the money' vs 'in the money' call options. But, after a decline, UMAX will still be selling at-the-money options, which can potentially 'lock in' losses (positions get called away) even with a small uptick in prices. Thus, ZWU could have more upside potential overall. A similar scenario comparison occurs with QMAX and TXF. Which one to choose really depends on an investor's goals. If yield is the prime goal, then QMAX and UMAX we think would be fine. BUT..note QMAX is too small right now for a recommendation, and we would wait until it gets to $50M+ in assets. It is less than $1M right now.