5 Bargain Funds With Safe 11% Yields

5 Bargain Funds With Safe 11% Yields

If you’ve been on the sidelines as this market grinds higher, you’re probably suffering a severe case of FOMO (fear of missing out).

It’s a terrible feeling, but today I’m going to cure you of it entirely, because it’s not too late to jump in!

The key is to zero in on a group of investments known as closed-end funds.

I’ll tell you about them—and introduce you to 5 attractive CEFs—in a moment. But for now, here’s the upshot: these overlooked, easy-to-buy funds are beating the market, but some are still priced at big discounts to their “true” value.

That means you’re not only going to get a strong return here, but you’ll also get a lot of income, too. In fact, the 5 funds I’ll tell you about today trade at big discounts while paying over 11% in annualized dividends!

That’s not a typo.

So if you throw $150,000 into these funds, you’ll get about $1,375 per month in income. If you want to get that same amount from the S&P 500, you’d need to put $868,000 into the SPDR S&P 500 ETF (SPY)!

(It’s hard to overstate the income-producing power of CEFs. As I showed you on July 18, you can easily build a livable income stream off just a $300,000 nest egg with these dividend wonders.)

How do these 5 funds do it? Simple: savvy investments, diversification and a careful use of leverage.

So without further ado, let’s take a closer look at these 5 funds—and how they deliver those stellar returns.

5 Cheap High-Yielding CEFs

Let’s start with their discounts.

You’ll see that the fifth column in the chart above reads “%Premium/Discount.” That’s the difference between these funds’ market prices and the value of the securities they hold, or their net asset value (NAV). You could think of NAV as these funds’ “true” value.

And these 5 are trading at an average 6.2% discount to NAV, which means we’re getting every dollar of their assets for just $0.94. Plus we’re getting an average 11.3% dividend yield, to boot!

And when you put these funds together, you get a reasonably diverse “mini-portfolio.”

The Virtus Total Return Fund (ZF) focuses on US stocks in the energy sector, with familiar firms like Kinder Morgan (KMI), American Tower (AMT) and PG&E (PCG) among its top holdings. Last August, ZF was trading at a 4% discount to its NAV; if it returns to that level, you’re looking at an instant 4% gain on top of the fund’s 11.7% dividend yield.

Then there’s the Guggenheim Enhanced Equity Income Fund (GPM), which holds a bunch of different firms, such as Wynn Resorts (WYNN), Micron Technology (MU) and FMC Corp (FMC). Thanks to strong gains on those investments, GPM has given investors a 16.6% total return over the last year, as well as an 11.6% dividend yield:

The Chart Every Investor Wants to See

Funny thing is, the market isn’t rewarding those gains with a high price—GPM trades at a 4% discount to NAV, meaning we can look forward to more capital gains soon.

Similarly, the Voya Natural Resources Equity Income Fund (IRR) has gone up 7% in the last year, despite the recent decline in oil prices, but it’s still trading at an unusually high discount to NAV. In fact, IRR was trading at a premium to NAV as recently as May, meaning there’s room for capital gains on top of the fund’s 11.3% dividend.

IRR Shakes Off Low Oil

A 14.6% total return has come to folks who hold the NexPoint Credit Strategies Fund (NHF), which is still trading at a discount despite that strong showing. While NHF soared late last year and earlier this year, that run has taken a breather, giving us a nice entry point:

NHF’s Buy Window Slides Open

Finally, to add more diversification, we can jump into the Wells Fargo Global Dividend Opportunity Fund (EOD), which is up 12% over the last year, thanks to its focus on high-quality companies abroad that have only recently grabbed the herd’s attention.

EOD’s Global Approach Pays Off

Management’s smart moves have been helping EOD investors earn a tidy income stream, but bigger gains will likely come as soon as the fund’s unusually high 5.7% discount to NAV reverts to its historic mean. EOD was trading at a premium a year ago, and it’s likely to head back to those levels soon.

Warning: Don’t Buy These 5 CEFs Until You Read This

Before you run out and buy these 5 names, there’s something you must know.

If you want to build many years of steady retirement income, these 5 CEFs aren’t for you. Because while their 11%+ income streams are extraordinary, all 5 have a history of slashing their payouts.

That makes them great for the short to medium term, but if you buy thinking you’re getting a “set-it-and-forget-it” dividend stream here, you could be in for a nasty surprise!

You’re far better off looking to my 4 favorite CEFs now, which I’ve just laid out in a brand new FREE report. Unlike the 5 funds above, each of my top 4 picks hands you dividends that are are steady—and GROWING.

Oh, and they trade at far bigger discounts to NAV, so you’re locked in for quick double-digit upside too!

In fact, my proven fund-picking system has flagged these 4 amazing funds for easy 28% total returns (including dividends), on average, in the next 12 months!

I can’t wait to tell you about these 4 retirement lifesavers. Go right here to get your FREE report and discover all the details—names, ticker symbols, buy-under prices and more.

About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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