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Tekla World Healthcare Fund: High-Yield, High-Expense, Tax-Effective Fund

Published Fri, 18 Dec 2020 14:56:31 -0500 on Seeking Alpha

Seeking AlphaClosed End FundsTekla World Healthcare Fund: High-Yield, High-Expense, Tax-Effective FundDec. 18, 2020 2:56 PM ET|| About: Tekla World Healthcare Fund (THW), Includes: BME, GRX, THQby: Michael A. Gayed, CFAMichael A. Gayed, CFA The Lead-Lag ReportAnticipate Corrections and Volatility with Award Winning ResearchSummaryTHW is a non-diversified closed-end fund traded on the NYSE.
Invests in equities as well as debt securities.
One of the highest-yielding funds amongst peers with a TTM dividend yield of 8.96%.
Without passion you don't have energy. Without energy, you have nothing - Warren Buffett
Tekla World Healthcare Fund (NYSE: THW) employs a versatile growth and income investment strategy investing across all healthcare subsectors and a company's full capital structure. It invests at least 40% of AUM in ex-U.S. companies or those with substantial ex-U.S. revenues.
The current pandemic will serve as a strong catalyst for the healthcare sector, as governments and institutions increase investments in these companies in the future.
Another significant advantage of investing in an equity closed-end fund such as THW is the tax aspect. Distributions made by the fund in dividends are not subject to tax at the time of distribution. Instead, an investor-only gets taxed when he decides to sell his investment. In such a case, the dividends are taxed as capital gains. Investors can, therefore, theoretically defer taxation on distributions indefinitely if they decide to hold onto their investments.
The fund's AUM is ~$471mm, and it has a trailing dividend yield of 8.96%, the highest amongst its peers. However, investors should be aware of this fund's high expense ratio (1.86%).

Constituent Holdings About 74% of THW's exposure is to healthcare equities. Within the healthcare sector, THW invests in biotechnology, pharmaceuticals, healthcare equipment, healthcare supplies, life science tools and services, healthcare distributors, managed... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BLACKROCK HEALTH SCIENCES TRUST 38.18   0.0 0.00 0.00 6.26
GABELLI GLOBAL HEALTHCARE & WELLNESSRX TRUST 10.70   0.0 0.00 0.00 5.24

BLACKROCK HEALTH SCIENCES TRUST - BME
BLACKROCK HEALTH SCIENCES TRUST - BME  


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