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Earn A 7% Yield From 2022 Term Closed-End Fund

Published Tue, 21 Nov 2017 15:07:14 -0500 on Seeking Alpha

Introduction
First Trust Senior Floating Rate 2022 Target Term Fund

Stock Ticker Symbol: (NYSE: FIV)
Current price: Approximately $9.18/share. Any price of $9.25 or less is very reasonable in my view and still offers an excellent risk/reward.
Net Asset Value: $9.70 as of 11/17/2017, so the shares are trading at a 5.4% discount (you can look up NAV through ticker: XFIVX), which is significant for a closed-end fund with a termination date. See price chart below. As can be seen, the NAV has been quite stable since fund inception in December 2016. In fact, the NAV has not budged much from the $9.80 level, now only 1% below this level in the last few weeks. Until July, the market price was trading above NAV, but started to drift down below NAV in August and September. But along with many CEFs and the high yield market, the market price began to dramatically fall below NAV - unreasonably in my opinion and far beyond the minor swoon in high yield. The discount is powerful, as not only does it increase the current yield, but since the fund terminates in February 2022, the liquidation at NAV will provide another boost to returns, as discussed below. Unlike many CEFs that trade at discounts but have no prospects for the discount to be eliminated since they are perpetual funds, a term fund has a termination date, which means the discount will narrow as it approaches liquidation and eventually be completely eliminated.

I have watched FIV plunge in the last two... Read more


FIV - FIV
FIV - FIV  


Older articles featuring Fiv (FIV):
First Trust Senior Floating Rate 2022 Target Term Fund Declares its Monthly Common Share Distribution of $0.0128 Per...
First Trust Senior Floating Rate 2022 Target Term Fund Declares its Monthly Common Share Distribution of $0.0153 Per...
First Trust Senior Floating Rate 2022 Target Term Fund Declares its Monthly Common Share Distribution of $0.0153 Per...
First Trust Senior Floating Rate 2022 Target Term Fund Declares its Monthly Common Share Distribution of $0.0178 Per...
Stable Yield With Closed-End Funds: Term CEF Ladder

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