Three closed end bond funds.

music selection:  “Come As You Are” — Nirvana

The most impactful decision most investors ever make is with regards to their Asset Allocation.  Lately, I’ve noticed a mania for equities at the expense of fixed income.  With CAPE near an all time high, it makes a lot of sense to have a fixed income allocation.  My long term AA calls for 60% equity and 40% fixed income.  I like to keep my fixed income allocation in closed end funds that are purchased at a discount to NAV and pay a strong yield.  What follows is three selections where I would start my research if I was going to add fixed income today.  These names are attractively priced and  yield rich.

Advent Claymore Convertible Securities and Income (AGC) 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 an income only distribution on a monthly basis.

  • Discount to NAV – 11.20%
  • Yield – 10.07%
  • Effective leverage – 40.91%
  • Expense ratio – 3.49%
  • Learn more

NexPoint Strategic Opportunities 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 – 9.13%
  • Yield – 10.12%
  • 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 – 7.35%
  • Yield – 12.08%
  • Effective leverage – n/a
  • Expense ratio – 1.45%
  • Learn more

Devour your prey raptors!

Friday Fixed Income

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