The markets are open again after the holiday and I am putting capital to work.
music selection: “Meant To Live” — Switchfoot
I moved to de-risk my portfolio before the election and raise cash. Now, I have a lot of latent cash that needs to be deployed since it is evident the market is not going to do a post-election nosedive. I’m going with three closed end funds for income. And enough liquidity finally arrived to buy some UVXY puts at a reasonable strike.
First is Alpine Global Premier Property (AWP). This is a closed end fund that is in global equity and a sliver of global debt. The fund objective is high current income. Perfect for an income hungry lizard like me. The fund sells at nearly 18% discount to net asset value. A bargain! It yields 11.43% annualized, paid out on a monthly basis. This is a full position at 10k invested.
Next up, alphabetically, is Eaton Vance Senior Floating Rate Trust (EFR). This is a closed end fund that is invested in senior variable interest rate notes. I wanted to add more to JRO, which is another floating rate CEF I already hold but that one is trading at a significant premium to net asset value. EFR is trading at a 2.38% discount to net asset value and represents a better value. The fund yields 6.18% (paid monthly) and has upside in a rising interest rate environment. This is a half position at 5k, as JRO is already a 1.5X size position.
I also bought Clough Global Opportunities (GLO). The Fund seeks high total returns through investment in equity, corporate, sovereign global securities and through utilizing an options strategy. It is another closed end fund that represents a great value as it trades at a 16.21% discount to net asset value. The fund yields 11.14% percent annually, paid out on a monthly basis. This is another full position at 10k invested. These three buys get my 12 month projected distributions back up 23,397 or 97.49% of my projected budget. That’s sleep at night security.
I also bought some long dated UVXY puts now that liquidity has returned post-split. I bought 21 contracts of UVXY190118P00020000 for 12.95 a share in my taxable account. I added another 11 contracts in my tIRA account at the same price. I’ll hold till around the time the contracts are at the money or around 30 days if things go as planned. Longer holding periods could be necessary if there is a volatility spike, especially if it is long lasting.
Devour your prey raptors!