Closed-end Fund Income Investing

Quote from optioncoach:

Another candidate I am looking at this afternoon. This fund has a nice blend of common stocks, preferred stocks and corporate bonds for good income and intrafund diversification.

CSQ- Calamos Strategic Total Return Fund
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I like the key points you highlighted on CSQ. It's a shame that you just missed a nice bargain price by a few days. Personally, I might be inclined to wait for a pullback here given the nice run we had this week. That does run the risk of missing it or having to wait a while, but I think the beauty of these things is that there are so many of them and they fluctuate in discount enough that you can afford to be choosey and pick your spots.

If you view the discount like an oscillator, on this one >10% is oversold, and it usually bounces off that level. Right now it's somewhere between moderately oversold and at it's average. The NAV is also brushing it's highs.
 
The real beauty is that the share price and NAV can stay flat all year and I will still be happy harvesting that >8% yield. As I said I see the middle range of the discount closer to 6% so I may get another 1 - 2% of share price appreciation. Of course if it does dip back to -10% I will certainly grab some more. I currently do not own it (market closed when I finished my research) but will grab some on Monday.

I want to also add some insured muni CEFs to balance out the higher risk items I want to add.

Quote from Hamlet:

I like the key points you highlighted on CSQ. It's a shame that you just missed a nice bargain price by a few days. Personally, I might be inclined to wait for a pullback here given the nice run we had this week. That does run the risk of missing it or having to wait a while, but I think the beauty of these things is that there are so many of them and they fluctuate in discount enough that you can afford to be choosey and pick your spots.

If you view the discount like an oscillator, on this one >10% is oversold, and it usually bounces off that level. Right now it's somewhere between moderately oversold and at it's average. The NAV is also brushing it's highs.
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I have owned CIK for more than a year or so. It has fallen since my purchase price but love that yield. I will be buying more on Monday to bring down my purchase price and grab more high yield income. I try and keep my CEFs well diversified so the share price fluctations are almost hedged out completely witht he income yield protected.


Quote from mtnclimber:

Timely subject for me, don't know how I missed this thread before. I picked up some
CIK - CS Asset Mgmt Income Fund
price $3.81
disc. -10.17%
yield 9.40%

just yesterday. I wasn't thinking of tax loss selling when looking at their chart. I was trying to see a GM angle to it.

As for REIT CEFs, I've held
IGR - ING Global Real Estate
$17.01
-5.26%
8.10%

just since July. 60% US, 40% Int'l. I like that additional touch of diversification.
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CSQ closed yesterday at $13.99, up from the price of my previous post. I am going to grab some at the opening today since the discount is starting to narrow further. I certainly missed this one by a few weeks but it is still good enough in my opinion to grab. SO I am jumping on ;)


Quote from optioncoach:

Another candidate I am looking at this afternoon. This fund has a nice blend of common stocks, preferred stocks and corporate bonds for good income and intrafund diversification.

CSQ- Calamos Strategic Total Return Fund

Price: $13.71 (1/5/06)
NAV: $14.95
Disc. -8.29%
Yield: 8.53%.
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After Merkel's and Bush's meeting today, all I want to do is buy more energies.

Went long BGR recently:
as of 1/12/06:
NAV: 29.88
Price: 26.50
Discount: 11%
Yield: 5.6%

Only a 25% exposure to MLP's which is fine with me.

I have been a bit lazy but believe this CEF is the lowest discount energy/materials CEF.

Any other favorites?
 
A CEF I currently own and decided to double my position in.

BGT - BlackRock Global Floating Rate Income

Price: $17.97 (1/24)
NAV: $19.25
Discount: -6.65%
Yield: 7.68%

BGT invests primarily in floating and variable rate loans from around the world. At least 80% of its assets will be in in such intruments of U.S and non-U.S. issuers. This also will include senior and secured loans made to corporations and businesses.

I think this is a great play to get international exposure and also to take advantage of rising interest rates around the world even if it seems the extent of rate hikes might have slowed. 67% of the fund's assets are in the U.S. so there is a good balance of U.S. v. non-U.S. assets.

The fund has increased its dividend from $.0933 a share to $0.115 a share and is still trading at a nice discount. The discount did drop as low as 12% late last year but still is decent in my opinion. More importantly the NAV has traded in a nice tight range of $19.48 - $18.96 so despite some volatility in the share price, the fund's assets have been pretty strong and should continue to support its dividends.

The fund can take advantage of rising rates well due to its low effective duration of 1.2. That means that current assets will not suffer too much as rates rise and principal and income can be reinvested at higher rates rather quickly.

As for risk, despite the U.S./non-U.S. balance, most of the top 10 holdings are debt of soverigns such as Ukraine, Panama (my favorite) and Venezuela, but no one holding is more than 2.56% of the total portfolio. So some foriegn risks but well spread out. Also the risks are that most floating rate loans are in the BBB and below rating. But again, good diversification can reduce the negative effects of default risk.

Overall I like the rising dividends, the play on rising interest rates abroad as well as in the U.S., the solid NAV and internal diversification.
 
good research. i will look at it also.
Quote from optioncoach:

A CEF I currently own and decided to double my position in.

BGT - BlackRock Global Floating Rate Income

Price: $17.97 (1/24)
NAV: $19.25
Discount: -6.65%
Yield: 7.68%

BGT invests primarily in floating and variable rate loans from around the world. At least 80% of its assets will be in in such intruments of U.S and non-U.S. issuers. This also will include senior and secured loans made to corporations and businesses.

I think this is a great play to get international exposure and also to take advantage of rising interest rates around the world even if it seems the extent of rate hikes might have slowed. 67% of the fund's assets are in the U.S. so there is a good balance of U.S. v. non-U.S. assets.

The fund has increased its dividend from $.0933 a share to $0.115 a share and is still trading at a nice discount. The discount did drop as low as 12% late last year but still is decent in my opinion. More importantly the NAV has traded in a nice tight range of $19.48 - $18.96 so despite some volatility in the share price, the fund's assets have been pretty strong and should continue to support its dividends.

The fund can take advantage of rising rates well due to its low effective duration of 1.2. That means that current assets will not suffer too much as rates rise and principal and income can be reinvested at higher rates rather quickly.

As for risk, despite the U.S./non-U.S. balance, most of the top 10 holdings are debt of soverigns such as Ukraine, Panama (my favorite) and Venezuela, but no one holding is more than 2.56% of the total portfolio. So some foriegn risks but well spread out. Also the risks are that most floating rate loans are in the BBB and below rating. But again, good diversification can reduce the negative effects of default risk.

Overall I like the rising dividends, the play on rising interest rates abroad as well as in the U.S., the solid NAV and internal diversification.
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Quote from optioncoach:

A CEF I currently own and decided to double my position in.

BGT - BlackRock Global Floating Rate Income

Price: $17.97 (1/24)
NAV: $19.25
Discount: -6.65%
Yield: 7.68%

BGT invests primarily in floating and variable rate loans from around the world. At least 80% of its assets will be in in such intruments of U.S and non-U.S. issuers. This also will include senior and secured loans made to corporations and businesses.

I think this is a great play to get international exposure and also to take advantage of rising interest rates around the world even if it seems the extent of rate hikes might have slowed. 67% of the fund's assets are in the U.S. so there is a good balance of U.S. v. non-U.S. assets.

The fund has increased its dividend from $.0933 a share to $0.115 a share and is still trading at a nice discount. The discount did drop as low as 12% late last year but still is decent in my opinion. More importantly the NAV has traded in a nice tight range of $19.48 - $18.96 so despite some volatility in the share price, the fund's assets have been pretty strong and should continue to support its dividends.

The fund can take advantage of rising rates well due to its low effective duration of 1.2. That means that current assets will not suffer too much as rates rise and principal and income can be reinvested at higher rates rather quickly.

As for risk, despite the U.S./non-U.S. balance, most of the top 10 holdings are debt of soverigns such as Ukraine, Panama (my favorite) and Venezuela, but no one holding is more than 2.56% of the total portfolio. So some foriegn risks but well spread out. Also the risks are that most floating rate loans are in the BBB and below rating. But again, good diversification can reduce the negative effects of default risk.

Overall I like the rising dividends, the play on rising interest rates abroad as well as in the U.S., the solid NAV and internal diversification.
More...

Interesting. I am somewhat shy of emerging market debt, after its multi-year run up. Nor am I wild about its only 7.6% dividend currently for what is predominatly 'junk' (90
% BBB and below rated). I would suggest instead looking at EVG which is a varaible floater yielding 8.2% at a 9% discount with some foreign exposure, and a somewhat better credit rating.

However, as far as emerging market bond funds go, for diversification and the like, this probably isn't a bad choice.

JPS @14 today.
 
Looking at ETG currently - tax advantaged (15% tax rate) CEF which is weighted towards energies and 35% international weighted.

It has narrowed from its 13% discount to about 9% but is yielding 6.5%.

Looks like a bit of undistributed UNII from the annual reports, etc...

I like it. Am looking to buy in at the most favorable discount I can vs. buying more BGR.
 
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