The MLP sector has been one of maximum pain for investors. Such long and brutal bear markets often tend to produce conditions for maximum returns for sectors. Often, not always though. We have stated our bias here previously, and the MLPs investors will be best served by sticking to quality and avoiding common shares. Preferred shares and baby bonds where feasible offer the best possible risk-adjusted returns, in our view.

But what if we are wrong? What if the sector has bottomed and the market has discounted the tremors ahead? In that case, which is the best way to play the sector? We recently highlighted two funds in this space (see here and here), and neither of them come close to the one we are about to talk about today.

The First Trust MLP & Energy Income Fund (FEI) is one of the best-performing MLP funds and is shockingly ignored. This “not-so-well-known” closed-end fund invests in the MLP sector using one of our favorite strategies. It uses covered calls to reduce volatility and enhance returns. We have always deployed options in our own trades, and they are the single best “free” source of alpha there is. They act to reduce volatility and also help investors buy low and sell high (not a marijuana reference).

The Fund

FEI has managed to do something rather extraordinary from the point of view of the common investor. It has taken leverage, within a sector that has gotten decimated, and managed to outperform non-leveraged passive ETFs like ALPS Alerian MLP ETF (AMLP).

ChartData by YCharts

That is a truly outstanding achievement from the point of view of the common investor, but one we predicted as the fund was busy selling covered calls in a thoughtful manner. FEI delivered -47.79% over the last five years

(Bloomberg) —



a sign in front of a building: The Vanguard Group headquarters are seen in Malvern, Pennsylvania, U.S.


© Photographer: Bloomberg/Bloomberg
The Vanguard Group headquarters are seen in Malvern, Pennsylvania, U.S.

Vanguard Group Inc. returned about $21 billion in managed assets to government clients in China as part of a global shift to focus on low-cost funds for individual investors, according to people familiar with the matter. BlackRock Inc. and Amundi SA are being considered to manage a portion of the funds returned by Vanguard.

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The assets include about $10 billion that Vanguard had managed for each of China’s State Administration of Foreign Exchange and the China Investment Corp. sovereign wealth fund, the people said, declining to be identified as the matter is private. More than $1 billion was returned to the national pension fund, they said.

The currency regulator will probably transfer oversight of its money to other managers including BlackRock, while the pension fund is likely to pick Paris-based Amundi to manage some of its accounts, the people said. CIC folded the Vanguard funds into its own index investment platform, they said.

Vanguard, the National Council for Social Security Fund, BlackRock and Amundi declined to comment. CIC and China’s currency regulator didn’t immediately reply to requests for comment.

Vanguard, the world’s second-largest money manager, is overhauling its Asia strategy, pulling out of Hong Kong and Japan to focus on individual investors in faster-growing markets. While China remains key for Vanguard as the nation opens its markets wider, the exit from the institutional business hands an unexpected windfall to competitors as they also step up their forays into the 100 trillion yuan ($15 trillion) asset management market.

Read more on BlackRock’s recent expansion in China

Vanguard is trying to move away from managing funds for institutional clients, a business that’s more demanding and less profitable, the people said. The sovereign clients’ relationship managers

Introduction

On January 26, 2018, I wrote an article titled: “Owens & Minor, Inc.: Irresistible Yield, Irresistible Valuation” where I offered the company as an extremely undervalued Dividend Contender research candidate. I also pointed out that the company was in transformation. However, I underestimated what that transformation meant, at least over the short run.

I also pointed out that Owens & Minor was a reader’s request, and I quote: “Recently, I have had several requests to write an article about Owens & Minor, Inc. (OMI). I had not looked at this company in a while, and boy oh boy, was I surprised at what I found. Owens & Minor is on the “Dividend Contender” list produced by David Fish. Owens & Minor has raised its dividend for 20 consecutive years, which leaves it only five years away from “Dividend Champion” status. Therefore, I consider Owens & Minor a classic dividend growth stock that’s extremely undervalued.”

Additionally, this is what the company looked like based on FAST Graphs on January 24, 2018. The company’s operating history was decent, and as stated above, the dividend had increased for 20 consecutive years and the stock appeared extremely undervalued based on the forecast earnings estimates at that time.

However, when I fast-forward to January 31, 2019, here is what actually happened to both Owens & Minor, Inc.’s actual earnings and stock price. Instead of growing as the forecast showed on January 24, 2018, earnings fell precipitously by 21% in 2017, followed by 29% in 2018 and finally by an additional 48% in 2019. As a result, the stock price fell from the $21.74 it was trading at on January 24, 2018, to only $5.17 by December 31, 2019. This represented more than a 70% price decline at that point. However, the stock went on

Democcratic vice presidential candidate Kamala Harris went after President Trump for not paying enough money in taxes, and questioned who he might owe money to.

“We now know because of great investigative journalism that Donald Trump paid $750 in taxes,” Harris said during Wednesday night’s vice presidential debate. “When I first heard about it, I literally said, ‘You mean $750,000?’ Nope $750.”

Harris was referring to a recent report by The New York Times, who obtained information on the president’s 2016 and 2017 taxes, both of which show he paid a total of $750 in federal taxes each year.

The Times also reported that he paid no federal income taxes for ten of the 15 years prior to winning the presidency in 2016, largely due to the fact that he reported financial loses greater than his income.

KAMALA HARRIS VOWS BIDEN WILL REPEAL TRUMP TAX CUTS ‘ON DAY ONE’

“We now know Donald Trump owes, and is in debt for $400 million, and just so that everyone is clear, when we say in debt – it means you owe money to somebody,” Harris said Wednesday in answer to a question about presidential transparency.

Harris added: “And it’d be really good to know who the president of the United States, the commander-in-chief owes money to, because the American people have a right to know what is influencing the president’s decisions and is he making those decisions on the best interests of the American people….or self-interest?”

Trump has disregarded the report as “fake news” and claimed that his tax returns would be available as soon as the IRS had completed their audit.

Pence, however, highlighted the president’s dismissal of the report and said, “the American people have a president who’s a businessman, a job creator, he’s paid tens of millions of dollars

TAXWATCH



a man wearing a suit and tie: IRS Commissioner Charles Rettig at a House Committee on Oversight and Reform hearing.


© Toni L. Sandys-Pool/Getty Images
IRS Commissioner Charles Rettig at a House Committee on Oversight and Reform hearing.

The Internal Revenue Service still has to process an estimated 2.5 million hard copy income tax returns within a pile of unopened mail that stands at 5.3 million pieces.

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That’s according to IRS Commissioner Charles Rettig, who testified Wednesday on the agency’s efforts to dig out from a mountain of unopened mail that accumulated during coronavirus-related IRS office shutdowns in the spring.

Rettig spoke to lawmakers, who have been getting an earful about the backlog. “We are hearing from our constituents right and left” about the status of returns and refunds, said Rep. Jody Hice, a Republican from Georgia.

Though there’s still a ways to go, the IRS has come a long way from the spring.

There was a time in the March and April period when the IRS had 23 million pieces of unopened mail, Rettig noted. As of late June, the IRS had 12.3 million pieces of mail to work through.

“I can certainly tell you our people are working really hard,” Rettig said at the U.S. House of Representatives’ Subcommittee on Government Operations within the Committee on Oversight and Reform.

Tax collection staff goes through 1.3 million pieces of mail a week, Rettig said, and it puts a priority on spotting hard copy returns and processing a refund, if one is due.

Rettig didn’t say how many of those still pending returns had refunds coming. But most returns result in a refund. Last year, more than 70% of returns ended with a refund for overpayment of income tax.

Gallery: How America’s COVID support compares to the rest of the world (Lovemoney)

The average refund this tax season was $2,741 as of late July, according to the