The high expense ratio for EDD is simply due to their leverage costs. As per their annual report dated 10/31/07 they had interest expenses on Reverse Repurchase Agreements and interest expenses on their Line of Credit. Those two expenses combined were greater than the advisory fee.

So, I don't quite understand the expense ratio shown on etfconnect.com which has the 2.21% management fee as being double that of "other" fees.Since the annual report is now dated and stale, perhaps the ratio has changed in the semi-annual report.

Personally, I think that a management fee of that magnitude is totally unwarranted and established solely to line the pockets of the managers. The high fee along with the steep discount to net asset value could attract dissident shareholder activity. Just my opinion.

Does anyone have a link to their semi-annual report dated 04/30/08? I am unable to find it.

The semi-annual report uploaded to the sec.gov web site on June 12, 2008 is their 2007 report, not 2008. So what happened to 2008?

Link to: EDD SEC filings

I also checked the Morgan Stanley web site and the only links they have are for the 2007 reports.

I have never owned any shares of EDD and despite my irritation with the rip-off management fee, I have a low ball bid to buy at $14.25.I'm in no hurry to buy as the market seems to want to go nowhere but down this summer. The next ex-div date will be late September anyway, so I can wait.

I really want to see the semi-annual report to get a better picture of how their distribution is situated. Whenever a CEF distribution starts to climb above 10% I am usually sceptical that it can be maintained without destroying the net asset value. This is especially true in a down market as we are experiencing now.

Best,

Steve