For your consideration.

music selection:  “Super Freak” — Rick James

Each Friday, I highlight three closed end funds that are invested in debt and debt like instruments that I consider attractively valued and yield rich.  This week, the yields go up to almost 12%.  I recommend a healthy allocation to this sector of the market.  Bonds and bond like investments reduce volatility of your portfolio.  They also provide strong cash flow.  Today’s three choices would provide an after tax (for most taxpayers) yield equivalent to the long term return of the S&P 500.  You’d never have to sell a share.  Investors who hold these investments in a tax advantaged account would do even better.

I allocate 40% of my portfolio to “income”.  It can be worthwhile to go as high as 72% if you are super conservative.  But no higher as the increasing correlation of assets begins to increase volatility at that point.  Long time readers know that most of the rest of the 60% is deployed in a manner that is intended to generate short term income as well.  That is my ‘sleep at night’ secret sauce.

Brookfield Real Assets Income (RA) is a closed end fund that seeks total return through investments in global convertible and non convertible securities and utilizing and option writing strategy.  It pays a managed distribution on a monthly basis.

  • Discount to NAV – 9.52%
  • Yield – 10.83%
  • Effective leverage – 21.08%
  • Expense ratio – 0.13%
  • Learn more

Delaware Investments Dividend and Income Fund, Inc. (DDF) is a closed end fund that seeks current income and capital appreciation through investment in equity and non convertible debt securities.  It pays a managed distribution on a monthly basis.

  • Discount to NAV – 9.15%
  • Yield – 11.24%
  • Effective leverage – 30.26%
  • Expense ratio – 1.98%
  • Learn more

Eaton Vance Tax Advantaged Bond and Income (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 – 7.94%
  • Yield – 11.78%
  • Effective leverage – none
  • Expense ratio – 1.45%
  • Learn more

Devour your prey raptors!

Friday Fixed Income

Never miss another opportunity to devour prey!

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