Three Fixed Income Picks
music selection: “Children Of The Damned” — Iron Maiden
A trader needs the discretion to not make a trade if nothing attractive is on offer. It makes no sense to pick up nickles in front of a steamroller. I like to keep 40% of my portfolio in fixed income within Closed End Funds bought at a discount to NAV. This provides a significant portion of my budget in case I need to sit back and let the markets cool off before making trades.
Each Friday, I recommend three CEFs that are yield rich and trading at an attractive price. This week, two names are making return appearances and I offer up one new possible trade.
Aberdeen Inc. Credit Strategies (ACP) is a closed end fund that invests in senior loans. It pays monthly and the distribution type is “income only”.
- Discount to NAV – 5.95%
- Yield – 10.01%
Franklin Limited Duration Inco (FTF) is a closed end fund that invests high yield corporate bonds, floating rate bank loans and mortgage and other asset backed securities. It pays monthly and the distribution type is “managed distribution”.
- Discount to NAV – 4.04%
- Yield – 10.53%
EV Tax Advantaged Bond & Option (EXD) is a closed end fund that invests in high quality bonds with a rules based options overlay strategy. It pays quarterly and the distribution type is “managed distribution”.
- Discount to NAV – 6.61%
- Yield – 11.25%
Devour your prey raptors!