QQQX - 5 Best CEFs This Month For Yields Up To 14%

2025-03-23 08:00:00 ET

Summary

• For income investors, closed-end funds remain an attractive investment class that covers various asset classes and promises high distributions and reasonable total returns.
• Closed-end funds, or CEFs, are generally characterized by higher volatility and deeper drawdowns than the broader market. For these reasons, they are not suited for everyone.
• In this monthly series, we highlight five CEFs with solid track records that pay high distributions and offer "excess" discounts. We try to separate the wheat from the chaff using our filtering process to select just five CEFs every month from around 500 closed-end funds.

Introduction:

The market has lost a lot of ground recently, accompanied by a sharp rise in volatility. In fact, as we write this, the S&P 500 Index (SP500) sits close to the correction territory of -10%. Along with the broader market, CEFs (closed-end funds) have lost some ground as well, and discounts have widened. But overall, they have done reasonably well. Obviously, some sectors have done better than others; for example, the energy and financial sectors have done better, while the worst-performing sector was technology.

Why CEFs?

The broader market, as represented by the S&P 500, provides a dismal level of yield of less than 1.30%. Income investors and retirees can't survive on that level of income unless they have a very large pool of capital. Alternatively, one can find solid blue chip individual dividend stocks that pay much higher than the S&P 500. They can also provide market-matching growth on a longer-term basis. To identify such stocks, we also publish a monthly article on the "5 Best DGI stocks." You can find the most recent one here. ...

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