Raising AOD to Strong Buy, Lowering AGD to Sell Amidst Worsening Fundamentals

A finance expert with Bloomberg experience raises the rating of AOD to Strong Buy while lowering AGD to Sell. The expert believes that the fundamentals have worsened for AGD, making AOD more attractive. The author emphasizes the inevitability of this outcome, citing worsening fundamentals for AGD and improved prospects for AOD.

In a recent analysis, a finance expert with Bloomberg experience has raised the rating of the abrdn Total Dynamic Dividend Fund (AOD) to a Strong Buy while lowering the rating of the abrdn Global Dynamic Dividend Fund (AGD) to a Sell. The expert's decision is based on the deteriorating fundamentals of AGD, making AOD a more attractive investment option You Can't Fight Facts. Raising AOD To A Strong Buy While Lowering AGD To A Sell^[1].

Both AOD and AGD are equity-based closed-end funds (CEFs) from Aberdeen. Despite their similar portfolios, AGD has historically underperformed AOD in terms of market price, even though their NAV performances are nearly identical You Can't Fight Facts. Raising AOD To A Strong Buy While Lowering AGD To A Sell^[1]. The primary difference between the two funds is their size: AOD is roughly 3.5 times larger than AGD.

The expert highlights that, despite the recent performance discrepancy, AGD's market price premium (+16.6%) is significantly higher than AOD's market price discount (-5.7%). Additionally, AOD offers a higher current market yield of +12.6% compared to AGD's +9.7% You Can't Fight Facts. Raising AOD To A Strong Buy While Lowering AGD To A Sell^[1]. This yield difference, coupled with AOD's larger share count (105 million shares vs. 29.9 million for AGD), makes AOD a more appealing choice for institutional investors seeking higher income with minimal NAV risk.

The expert's analysis suggests that the current market momentum for AGD may not be sustainable. The significant market price premium and the higher yield offered by AOD are compelling factors that will likely attract institutional investors. The larger share count and liquidity of AOD further enhance its appeal, making it a more attractive investment option.

In conclusion, the finance expert's decision to raise AOD's rating and lower AGD's rating is based on objective financial analysis. The improved fundamentals of AOD and the deteriorating prospects of AGD make AOD a more attractive investment choice for investors seeking higher yields and liquidity.