CHI - Bancroft Fund: This 8%-Yielding CEF Provides Some Income But It's Nothing Special

2024-05-28 18:02:35 ET

Summary

• The Bancroft Fund offers a high yield of 8.17% for income-focused investors, but its yield is relatively low compared to other similar closed-end funds.
• The BCV closed-end fund's share price performance over the past five years is discouraging, as it has declined by 25.63%.
• The fund's holdings primarily consist of convertible securities, with only one common stock position. This is a bit less common equity exposure than peers.
• The fund holds bonds from a number of companies that are unusual to see in a convertible bond fund, so this fund could add some diversification to a portfolio.
• The fund appears to be fully covering its distribution, and it trades at a very attractive discount to net asset value.

The Bancroft Fund ( BCV ) is a little-known closed-end fund aka CEF that provides an option for income-focused investors to achieve their goals. The fund manages to do fairly well at this task, as it currently boasts an 8.17% yield. This is a much higher yield than that offered by most indices, although it is not especially high when compared to other closed-end funds that use a similar investment strategy:

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