MMLP - Income Opportunities: Interpreting Closed-End Fund Distributions

• Compared to other income-oriented sectors like bonds and REITs, closed-end funds (CEFs) have considerably higher yields.
• Currently, the S-Network Composite Closed-End Fund Index (CEFX) has a yield of 6.97% and the S-Network Municipal Bond Closed-End Fund Index (CEFMX) has a yield of 4.32% (6.86% tax-equivalent).
• Fixed-income CEFs can use leverage - borrowing at lower, short-term rates and reinvesting in higher rates - to enhance earnings and income. Lower interest rate environments, like our current environment, are particularly beneficial for funds that use leverage.
• Risk-averseinvestors may prefer to invest in CEFs through professionally managedindex-linked products which provide access to a variety of CEF managers andstyles, while still providing above average yield relative to most othersectors.

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