I keep a roughly 40% or greater allocation to income securities. One of my favorite places to invest for yield is closed end debt funds trading at a discount to NAV. You can get exposure to the underlying securities for less than their market value. You also usually get moderate leverage on a sleepy asset class. The yields can be quite tasty. Three funds for your consideration this week. I am not currently in the market for more CEFs but if I was, I would start my research here. Stay tuned for an options trade on Monday.
music selection: “Wolves At The Door” — Bad Seed Rising
Nuveen Credit Strategies Income Fund (JQC) is a closed end fund that seeks seeks high current income; and its secondary objective is total return. It pays a Managed distribution on a monthly basis.
- Discount to NAV – 11.19%
- Yield – 15.96%
- Effective leverage – 37.01%
- Expense ratio – 3.01%
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RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (OPP) is a closed end fund that seeks current income. It pays a managed distribution on a monthly basis.
- Discount to NAV – 7.26%
- Yield – 13.25%
- Effective leverage – 26.25%
- Expense ratio – 2.67%
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Virtus Global Multi-Sector Income (VGI) is a closed end fund that seeks to maximize current income while preserving capital by investing in a portfolio of fixed income securities of U.S. and non-U.S.issuers. It pays a managed distribution on a monthly basis.
- Discount to NAV – 7.30%
- Yield – 12.27%
- Effective leverage – 28.18%
- Expense ratio – 2.96%
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Devour your prey raptors!