Closed End Fund Portfolios Boast

Here's a headline none of us will see or hear in any financial news media, not ever. But how many of you have generated nearly 10% in potential spending/reinvestment money thus far in 2022? Time to learn more about the income production capabilities of Closed End Funds.
Although November income was slightly less than the 11 month average, and in spite of a significant number of distribution reductions throughout the year, the annualized base income rate was just 9/100 shy of 10%... with December additions on the way . All accounts in the study were up in market value for the month, which accounts for the non 10% result through November. Yield on Working Capital is estimated to be 8.7%, so in need of the usual great December income to break into double digits.
The financial environment did not change significantly in November as all of the worries that impacted previous months were still in play: inflation, a stubborn correction (since August 2021 for income CEFs and September for equities), the toxic political environment, recession possibilities, war in Ukraine, and not a whole lot of profit taking to help fuel the income fires.
The bullet point numbers that follow are for 95 portfolios greater than $100,000 and an average portfolio size of roughly $600,000 in working capital... market value on these portfolios is about 16% lower. About 51% contain no equity CEFs, and of those that do, only ten contain more than 50%... none more than 60%. 27 accounts are below $200k and nine are in 7 figures.
· Total CEF income was nearly $4.4 million, for an annualized yield of 8.63% on working capital and 9.91% on current market value. How much above the 10% mark the total 2022 distributions will be is totally dependent on the year end specials... and it is likely that those will be much less generous than in 2021.
· Only three accounts had a yield under 8%. Two of those are invested 25% in tax free CEFs, the third 50%. These three accounts hold 75% of the municipal bond investments that make up about 4% of the total portfolio, roughly $2 million of working capital.
· 14 accounts have earned over 10% through 2022's first 11 months. None of these contained tax free income CEFs. Sixty six portfolios (84%) have produced over 9% in realized spendable income! The average ten month yield in the 10 accounts with 50% or more invested in equities was 9.32%
Here's another thing to consider. Nearly all of these 95 portfolios belong to retired or semi-retired individuals who are withdrawing some living expenses and management fees from their portfolios. Some will occasionally withdraw more than the 4% that financial advisors say is to be expected.
So the income numbers we're talking about above are not only after all CEF fund expenses; they are after all expenses and fees. It just boggles the mind to think that so few investors are familiar with Closed End Fund investing. What's in your wallet.
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