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THW: Sitting Tight With A 12% Yield From This Well-Diversified CEF

Published Fri, 21 Dec 2018 17:16:16 -0500 on Seeking Alpha

One of the major stories in the healthcare space recently is the $4.7 billion judgment against industry giant Johnson & Johnson (JNJ) concerning the alleged the presence of asbestos in baby powder. As might be expected, this had a devastating impact on the stock price, which plunged 10.04% in a single day. This also had a negative impact on the share price of many healthcare funds as Johnson & Johnson has been a top holding for many funds. However, there's one fund that has not been impacted by this development at all and as such could remain a solid way for investors to take advantage of the historically-defensive nature of healthcare in today's turbulent market. That fund is the Tekla World Healthcare Fund (THW).
About The Fund
The fund's web site describes its objective as seeking current income and long-term capital gains by investing in companies engaged in the healthcare industry. It does this by investing in both debt and equity securities, although the majority of the fund's assets are invested in common stocks and warrants:
Source: Tekla Capital Management
The allocation to fixed income could certainly serve as a real advantage in today's market. This is due to the fact that debt and other fixed income securities are less vulnerable to fluctuations in the market due to the fact that they sit higher up in the capital stack than common equity and generally have a fixed dividend or interest payment that they must make to their... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
JOHNSON & JOHNSON 129.36   258.7 0.50 3.60 2.77
ASTRAZENECA 35.55   18.6 1.91 0.88 2.38
NOVARTIS 86.72   15.2 5.70 1.91 2.22


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