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A much better coverage, but most equity CEFs will require significant capital gains.
Source: https://seekingalpha.com/article/4577358-dpg-fine-fund-high-premium?source=feed_all_articles
Beyond comparisons to utility ETFs or the S&P500, many previous articles and comments about UTG argue for or against the fund vs. other CEFs in the same sector, mostly BUI, UTF, and DNP.
For investors with adequate allocation to PDO (and other PIMCO CEFs in the HDO model portfolio), PAXS presents an attractive alternative for its solid income prospects.
For starters, you can see in our earlier tables that preferred CEFs have outperformed almost all preferred ETFs over the last 5 years.
Glad we are in agreement, and happy to year CEFs have served you well in your financial independence.
I have a different take on some of the cc equity CEFs.
Investors who do not have an appetite for higher volatility should generally stay away from CEFs or at least avoid the leveraged CEFs.
Investors who do not have an appetite for higher volatility should generally stay away from CEFs or at least avoid the leveraged CEFs.
Our host goes on to suggest starting small with CEFs and building positions over time up to 20 or 25% of total holdings.
Preferred Stock CEFs have some distinct advantages over Preferred Stock ETFs, especially with regards to fund flows, liquidity needs, the use of leverage and significant price premiums/discounts versus NAV.
That flexibility is one of the best things about CEFs.
That said, the discount should tighten over time, closer to where other PIMCO taxable CEFs trade.
The comparison here is HYD against leveraged CEFs that own debt.
The fund's expense ratio isn't overly high relative to other CEFs.
The handful of other Muni CEFs that trade at tight discounts are the low-beta/unleveraged ones like NXP or those that massively overdistribute like NDMO.
We can see how the CEFs outperformed in the 0% rates environment in 2020/2021, but also had a massive drawdown in 2022.
When I talk to investors about closed-end funds (CEFs), I get an almost universal reaction: they simply can’t believe the outsized dividends—and upside potential—these funds boast are for real.