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Green & Gold Fund

Recommendation: Buy Energy Income and Growth Fund (FEN). Green & Gold Fund. WHO and WHAT is FEN?. FEN is a non-diversified, closed-end management investment company. The fund operates with 27% leverage (borrowings).

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Green & Gold Fund

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  1. Recommendation: Buy Energy Income and Growth Fund (FEN) Green & Gold Fund

  2. WHO and WHAT is FEN? • FEN is a non-diversified, closed-end management investment company. The fund operates with 27% leverage (borrowings). • FEN invests in publicly traded master limited partnerships (MLPs) and related entities in energy. • FEN is a closed-end fund, meaning it has various securities, new shares are rarely issued, and it will trade based on the net asset value (NAV) with a premium (discount).

  3. WHAT is an MLP? • An MLP is a “Master Limited Partnership” which allows the tax benefits of a partnership (no state or federal corporate income tax) with the liquidity of publicly traded securities. • They pay investors through quarterly required distributions (QRDs), which are determined by contracts between the general partner (business) and limited partners (investors). • The vast majority of MLPs are pipeline businesses because of the requirements of the QRDs and the steady income from the transportation of oil, gasoline, and natural gas.

  4. WHEN is FEN? • In late July FEN sold shares which caused a sell off and buying opportunity since the proceeds were reinvested. • Recently, the premium (discount) to NAV dropped into negative territory and it remains near the 52-week low.

  5. WHY is FEN? • The dividend alone is over 7% yield versus GGF’s yearly goal for returns of 6-8%. • Since inception, FEN’s nominal dividend has only increased (start: $.34, now: $.47), and the yield has not gone below 5%.

  6. Investment Information 3 Year Price Graph (Morningstar)

  7. SWOT Analysis • SWOT analysis, and how each point impacts company EPS/valuation multiple

  8. Investment Thesis • FEN offers a consistent dividend with good risk-adjusted return, which should be able to carry us through a turbulent market with limited downside while meeting the Fund’s objectives of 6-8% a year and performing well at RISE.

  9. Portfolio Placement / Recommendation • Sector : Energy/Utilities • Industry Group: Midstream oil and gas fund • Current Holdings: FEN, HES, PXJ, SU • Target Sector Allocation: 8.54%, $ • Current Sector Allocation: % , $ • Remaining Allocation: %, $ • BUY 150 shares of FEN at Limit Price of $26.85 (approx. $4028, xxx% of portfolio) • Holding Period/Exit Strategy:

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