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Friday Fixed Income

Three Closed End Funds.

music selection:  “Highway 90” — Jane Jensen

Each Friday, I share three closed end funds invested in debt and debt like instruments.  These funds are chosen based on yield and discount to NAV.  I allocate 40% of my portfolio to this strategy.  The result has been a passive cash return that exceeds my annual budgetary needs.  It is a great relief to not be forced to make options trades when nothing attractive is on offer.  Don’t pick up nickles in front of a steam roller!

Aberdeen Inc Credit Strategies (ACP) is a closed end fund that seeks a high level of current income with capital appreciation through investing in a portfolio of senior loans.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 8.48%
  • Yield – 10.43%
  • Effective leverage – 30.07%
  • Expense ratio – 2.26%
  • Learn more

NexPoint Strategic Opps Fund (NHF) is a closed end fund that seeks current income with capital appreciation through investment in floating and fixed rate loans, bonds, debt obligations, mortgage backed and asset backed securities, collateralized debt obligations and equities.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 14.65%
  • Yield – 10.70%
  • Effective leverage – 14.77%
  • Expense ratio – 2.21%
  • Learn more

Eaton Vance Tax Advantaged Bond And Option (EXD) is a closed end fund that seeks  to provide tax-advantaged current income and gains through the use of a tax-advantaged short-term, high quality bond strategy and a rules-based option overlay strategy. It pays a managed distribution on a quarterly basis.

  • Discount to NAV – 7.03%
  • Yield – 11.79%
  • Effective leverage – 0%
  • Expense ratio – 1.45
  • Learn more

Devour your prey raptors!

{ 2 comments… add one }
  • MD May 26, 2018, 2:31 am

    Thanks for this as always, LK. I struggle a bit to choose the right fixed funds for me as I’m unable to track the health of the underlyings. I’d like to invest in those on a regular basis but Im not sure to what extent is this “set and forget”?
    Also with the various options on the funds you are proposing here, I struggle to pick and choose TOP5 for me:)

    • The Lizard King May 26, 2018, 2:25 pm

      Welcome! I have sold exactly one of my closed end funds in the last 5 years or so. They tend to be very set and forget. I pay no attention to current share price and focus on whether the distribution is still coming in. I buy for the income stream, not for appreciation.

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