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Retirement Income: High-Yield, Sustainable Capital CEF Portfolio Continues To Shine At One Year

Published Tue, 04 Oct 2016 12:43:13 -0400 on Seeking Alpha

Updating the High-Yield, Sustainable Capital CEF Portfolio At One Year
At the end of 2015's third quarter I proposed a model portfolio of closed-end funds designed to to generate high current income with capital sustainability: The Stable-Capital, High Current-Income Portfolio ( A CEF Portfolio For High Current Income With Capital Preservation). Those objectives are, of course, the cliché of the income-investing world. It's rare to find an income fund that doesn't espouse those objectives. But at the time I felt market forces had converged to open a genuine opportunity consistent with those objectives.

As seen in the chart above, equity markets were sharply down. Closed-end funds, as they typically do, exaggerated the market turndown. Deep discounts, well out of normal ranges, were the order of the day for many CEFs as something akin to panic selling drove sharp declines in closed-end funds.
That portfolio now has run through a full year. I'll review its performance here.
I'll not spend time here rehashing the details of the portfolio; interested readers should refer to the cited article. But I will say that one incentive for building this model was my frustration with the performances of ETFs, ETNs and CEFs that offer portfolios of CEFs. Another was to emphasize how closed-end funds can, on occasion, offer excellent entry points because they tend to be subject to panic selling during periods of market turmoil. The third quarter was... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NICHOLAS-APP CONV & INCOME 5.65   0.0 0.00 0.00 11.07
H&Q HEALTHCARE INVESTORS 19.46   0.0 0.00 1.82 9.45
EATON VANCE TAX MAN GLOBAL BUY WRITE OPP FUND 9.38   0.0 0.00 0.00 9.14
EATON VANCE TAX-MAN DIVERSIFIED EQUITY 11.65   0.0 0.00 0.00 8.49
COHEN & STEERS CLOSED-END OPPORTUNITY FUND 12.52   0.0 0.00 0.00 8.29
PIMCO STRATEGIC GLOBAL GOVERNMENT FUND 9.40   0.0 0.00 0.00 7.71
COHEN & STEERS TOTAL RETURN REALTY FUND 14.35   0.0 0.00 0.00 6.66
POWERSHARES CEF INCOME COMPOSITE 22.41   0.0 0.00 0.00 6.12
ISHARES IBOXX $ HIGH YIELD CORPORATE BOND FUND 86.95   0.0 0.00 4.60 5.32
EATON VANCE MUNICIPAL BOND FUND 13.06   0.0 0.00 0.00 3.95