JHAA - How To Approach CEF Allocation In Income Portfolios

• November was a torrid month for both underlying assets and CEF discounts, resulting in near record monthly returns for the broader CEF space.
• While CEFs can generate additional yield above other types of investment vehicles, they also come with additional risks.
• With the CEF risk/reward picture less attractive now, we take a look at how investors can think about CEF allocations in their income portfolios.
• Though we continue to hold CEFs in our income portfolios, we have marginally reduced allocation to CEFs in favor of what are likely to be more resilient securities.
• This should allow us to be able to better take advantage of any opportunities over the medium term without having to sacrifice a lot of income in the process.

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