Q: With the downward trend of OIL -what effect will it have on the yield of ENCC ? etc?
5i Research Answer:
Yield will be connected to asset values and option premiums. In a declining energy sector, yields could be adjusted downward as call options will need to be sold at lower strike prices. This could impact the potential for capital gains in the fund. The rate was lowered in November 2022. The fund can also pay out return of capital to maintain distributions, but we think in any further weakness investors should at least be prepared for a possible small dividend reduction.