This Understated BlackRock Move Drove a Fast 12% Gain (More on the Way)

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This Understated BlackRock Move Drove a Fast 12% Gain (More on the Way)

One often-overlooked way for closed-end funds (CEFs) to give us a profit boost is for management to buy back a fund’s shares.

By now, buybacks are probably familiar to most investors: With “regular” stocks, buybacks reduce a company’s share count, which boosts earnings per share and other per-share metrics, indirectly boosting share prices.

With CEFs, buybacks have a bit of a different effect. With these high-yielding funds, we want to focus instead on how buybacks affect the discount to net asset value (NAV, or the value of a CEF’s underlying portfolio).

Buybacks, Fixed Share Counts Help Management “Control” CEF Discounts

Members of my CEF Insider service know that we love discounts to NAV because they’re the primary indicator of CEF value.… Read more

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These Unsung Buys Crush Hedge Funds, Yield 8%+

Hedge funds have a big problem: They can’t beat the market anymore.

If you read the press, you’ll see a lot of concern over this. If hedge funds aren’t cutting staff, they’re struggling to find talent to try to boost their returns. Moreover, the industry mostly keeps shuffling people within its ranks, undercutting the stability needed to make outperformance last.

So it’s kind of strange that hedge funds are managing more money than ever. The industry was managing $1 trillion in the mid-2000s, a milestone at the time. But now hedge funds are managing more than $4 trillion globally. And they’re still growing.… Read more

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The Economist Just Changed the Game for These 7.8% Dividends

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

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The Economist Just Changed the Game for These 7.8% Dividends

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

Read More

This Huge “Dividend Shift” Dropped May 3 (You Can Still Get In)

A couple weeks ago, on May 3, BlackRock, the world’s largest investment firm, did something that will send a shockwave through our favorite high-yield investments: closed-end funds (CEFs).

The result is likely to be higher prices for CEF investors in the future—and even steadier dividends, too. Most folks missed this change, but it’s only a matter of time until it makes itself known. We’re already seeing it kick in with some of these high-paying funds.

Before we go further, let’s be clear on what we’re talking about: The $400-billion universe of CEFs currently yields an eye-popping 8.2% on average.

How is that possible?… Read more

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This Ticker Turns Nvidia Into a 9.2% Dividend Payer

Stock market rallies climb walls of worry. Well, we have no shortage of such worries today!

A few days ago, Bloomberg lamented there was “no relief in sight for bonds”. This was ironic because relief—the catalyst for the next big bond rally—is hidden in plain sight. Despite the despair, 10-year Treasury rates are still a ways off from their recent 5% highs last October:

Reality Check: Rates Still Lower Than Last Year

If they put in a “lower high”—as I’m expecting they will, thanks to a slowing economy and labor market—it will be wildly bullish for bonds (which trade inverse rates.)… Read more

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My Outlook for Tech Stocks (and One 6.2%-Paying Fund) in 2024

The first week of 2024 was a rough one for stocks—and that, oddly enough, suggests we might see a good year for stocks in 2024.

But as we’ll discuss below, recent market moves also suggest some parts of the technology sector are starting to look just a little overbought now—especially one 6.2%-yielding tech-focused closed-end fund (CEF).

I know that’s a lot to lead off with, so let’s break it down.

A week and a half before Christmas, and before last year’s Santa Claus rally, I wrote that we didn’t want a Santa Claus rally to end ’23. That’s because these year-end market bounces have historically led to the following year to be weaker for the markets.… Read more

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My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

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My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

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3 Ways to Buy Stocks (and Bonds) for Up to 37% Off

Today I want to show you three funds that are highly unusual in a way that matters a lot to many folks: all three are free from a management-fee perspective.

In fact, these three funds—closed-end funds (CEFs), to be precise—are more than free: they have negative management costs!

What do I mean? Well, usually index funds sell themselves on being cheap. Fees on the Vanguard S&P 500 ETF (VOO), for example, are just 0.03%, or $300 in annual fees for every $1 million invested, in other words.

There are even funds out there that cost nothing, like the Fidelity ZERO Total Market Index Fund (FZROX), which has no expenses at all.… Read more

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