This $7 Trillion ‘Cashwave’ Will Be Poured Into Over 10% Dividends
We are in strange times when interest rates are at (or at least near) peaking, but most people still don’t realize it.When they finally arrived, a group Closed End Fund (CEF) could skyrocket (and pay double-digit dividends, too).
I’m talking about fixed income funds, but the “double-digit dividend” part is already well underway, and some of my holdings of corporate CEF yields have already gone up. CEF Insider Service break rate is over 12%. (Additional bonus: most fixed income CEFs also pay dividends monthly.)
By the way, I’m not the only one talking here. The company is the world’s largest asset manager, and its massive scale and extensive research resources give it access to next-level insights that no one else can compete with.
$9.4 Trillion Fixed Income Investors Tell Us to Buy Fixed Income CEFs Now
BlackRock, which manages a staggering $9.4 trillion in assets.lastlyfinancial statement “There are about 7 trillion money market accounts ready for when people feel interest rates are peaking and the bond market is flooding, and we need to be poised to catch that,” said Rob Capito, president of BlackRock.
In other words, there are plenty of savers who want to move their money from BlackRock’s high-interest savings accounts into funds that hold municipal and corporate bonds.
Clearly BlackRock is pitching to make more money here, but they’re not the only ones making money. It’s also a great strategy for savers, as bond prices rise when interest rates fall.
At the same time, as Kapito says, interest rates on high-yield savings accounts will fall, pushing much of that “set aside” cash into the bond market.
And before you ask, the reason we support fixed income CEFs is because we want human managers to manage portfolios, not algorithms. Because deep analysis is essential to successful fixed income investing (as well as the personal connections that only active managers can provide, they ensure access to the best new stocks as they are released).
That’s why investing in companies like BlackRock is a great strategy with corporate bonds. But you don’t have to follow this powerhouse. Other smaller operators also have strong histories.
Earnings and Profit from Actively Managed Fixed Income CEFs
you can see here Karamos Dynamic Convertible and Income Fund (CCD) and the BlackRock Multi-Sector Income Trust (BIT), The two CEFs focused on corporate bonds offer higher yields, with CCD paying 11.1% and BIT 10.3%. So if he deposits $10,000 into these funds, he will receive on average about $87.50 each month. That’s a six-figure income for just $1 million.
Not only are these funds paying out a hefty income stream, but we can see that they easily outpace their holdings of long-term Treasuries (top light blue line, down 7.2% over the past five years) and benchmark high-yield bond ETFs. SPDR Bloomberg High Yield Bond ETF (JNK), increased by just 13.3%.
And the better deals here are a bit surprising. Despite its BlackRock pedigree, BIT trades at a slight discount to net asset value (NAV, the value of the underlying bond portfolio) as I write this, while the lesser-known Karamos fund boasts a 2.7% premium. This just shows the mis-pricing that happens regularly in the CEF market (which we always aim to take advantage of). CEF Insider. )
Proven record of safety
But what if the recession hits like everyone expected last year? Sounds high, but let’s dig deeper.
4.9% of them are actually related to speculative grade bonds, Not all bonds. Most people don’t know it! They see the headline and are understandably apprehensive. But only 23% are speculative-grade bonds, according to S&P Global. So the worst-case scenario for the economy is 1.13% of all bonds defaulting. To put this in context, 5 of his 455 bonds in CCD defaulted, resulting in a total NAV loss of about 2%.
In other words, CCD could see a 2% reduction in its portfolio over the next two years due to default. But even that unlikely scenario would be dwarfed by the double-digit revenue streams that CCD shareholders could earn.
However, if you want even more security, there are other options, such as investment grade corporate bond funds that avoid bad debt entirely.of PIMCO Corporate & Income Opportunity Fund (PTY) is one such example, with an enviable track record of almost 900% profitability since its inception in 2002.
Safe and Profitable PTY
The problem is? PIMCO is probably the only CEF manager with more cachet than BlackRock, which translates into a higher premium for the fund. And now PTY comes with a 30% premium. This stock will never trade at a discount, but now would be a good time to put it on your watch list. And when that premium falls, say below the five-year average of 23%, it’s a good time to consider buying.
My top two fixed income CEF picks are: cheap Yield 9.5% or higher (dividends paid monthly)
My top two bond CEFs to buy right now boast huge dividends of 9.5% and 10.7% respectively, both We pay dividends every month!
These are included in a special report I put together that provides a unique ‘mini-portfolio’ of the CEF. The average yield is 9.1%. In addition to these two strong bond-holding “battleship funds,” we also get details on two more CEFs holding top blue chip stocks. Visa (V), Coca-Cola (KO) and Amazon.com (AMZN).
Combining this quartet results in an instant diversified fixed income and equity setup. Perfect Because of the “excess interest rate” market we are in now.
Additionally, all of these four income-generating plays cheap I really want a lot today 20% or more price increase from them the following year.
See also
• Warren Buffett dividend stocks
• Dividend Growth Stocks: 25 Aristocrat
• Future Dividend Aristocrats: Top Contenders
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
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We are in strange times when interest rates are at (or at least near) peaking, but most people still don’t realize it.When they finally arrived, a group Closed End Fund (CEF) could skyrocket (and pay double-digit dividends, too). I’m talking about fixed income funds, but the “double-digit dividend” part is already well underway, and some of my holdings of corporate CEF yields have already gone up. CEF Insider Service break rate is over 12%. (Additional bonus: most fixed income CEFs also pay dividends monthly.)
By the way, I’m not the only one talking here. The company is the world’s largest asset manager, and its massive scale and extensive research resources give it access to next-level insights that no one else can compete with. $9.4 Trillion Fixed Income Investors Tell Us to Buy Fixed Income CEFs Now BlackRock, which manages a staggering $9.4 trillion in assets.lastlyfinancial statement “There are about 7 trillion money market accounts ready for when people feel interest rates are peaking and the bond market is flooding, and we need to be poised to catch that,” said Rob Capito, president of BlackRock. In other words, there are plenty of savers who want to move their money from BlackRock’s high-interest savings accounts into funds that hold municipal and corporate bonds. Clearly BlackRock is pitching to make more money here, but they’re not the only ones making money. It’s also a great strategy for savers, as bond prices rise when interest rates fall.
At the same time, as Kapito says, interest rates on high-yield savings accounts will fall, pushing much of that “set aside” cash into the bond market. And before you ask, the reason we support fixed income CEFs is because we want human managers to manage portfolios, not algorithms. Because deep analysis is essential to successful fixed income investing (as well as the personal connections that only active managers can provide, they ensure access to the best new stocks as they are released). That’s why investing in companies like BlackRock is a great strategy with corporate bonds. But you don’t have to follow this powerhouse. Other smaller operators also have strong histories. Earnings and Profit from Actively Managed Fixed Income CEFs
you can see here Karamos Dynamic Convertible and Income Fund (CCD) and the BlackRock Multi-Sector Income Trust (BIT), The two CEFs focused on corporate bonds offer higher yields, with CCD paying 11.1% and BIT 10.3%. So if he deposits $10,000 into these funds, he will receive on average about $87.50 each month. That’s a six-figure income for just $1 million.
Not only are these funds paying out a hefty income stream, but we can see that they easily outpace their holdings of long-term Treasuries (top light blue line, down 7.2% over the past five years) and benchmark high-yield bond ETFs. SPDR Bloomberg High Yield Bond ETF (JNK), increased by just 13.3%. And the better deals here are a bit surprising. Despite its BlackRock pedigree, BIT trades at a slight discount to net asset value (NAV, the value of the underlying bond portfolio) as I write this, while the lesser-known Karamos fund boasts a 2.7% premium. This just shows the mis-pricing that happens regularly in the CEF market (which we always aim to take advantage of). CEF Insider. ) Proven record of safety But what if the recession hits like everyone expected last year? Sounds high, but let’s dig deeper. 4.9% of them are actually related to speculative grade bonds, Not all bonds. Most people don’t know it! They see the headline and are understandably apprehensive. But only 23% are speculative-grade bonds, according to S&P Global. So the worst-case scenario for the economy is 1.13% of all bonds defaulting. To put this in context, 5 of his 455 bonds in CCD defaulted, resulting in a total NAV loss of about 2%. In other words, CCD could see a 2% reduction in its portfolio over the next two years due to default. But even that unlikely scenario would be dwarfed by the double-digit revenue streams that CCD shareholders could earn.
However, if you want even more security, there are other options, such as investment grade corporate bond funds that avoid bad debt entirely.of PIMCO Corporate & Income Opportunity Fund (PTY) is one such example, with an enviable track record of almost 900% profitability since its inception in 2002. Safe and Profitable PTY
The problem is? PIMCO is probably the only CEF manager with more cachet than BlackRock, which translates into a higher premium for the fund. And now PTY comes with a 30% premium. This stock will never trade at a discount, but now would be a good time to put it on your watch list. And when that premium falls, say below the five-year average of 23%, it’s a good time to consider buying. My top two fixed income CEF picks are: cheap Yield 9.5% or higher (dividends paid monthly) My top two bond CEFs to buy right now boast huge dividends of 9.5% and 10.7% respectively, both We pay dividends every month!
These are included in a special report I put together that provides a unique ‘mini-portfolio’ of the CEF. The average yield is 9.1%. In addition to these two strong bond-holding “battleship funds,” we also get details on two more CEFs holding top blue chip stocks. Visa (V), Coca-Cola (KO) and Amazon.com (AMZN). Combining this quartet results in an instant diversified fixed income and equity setup. Perfect Because of the “excess interest rate” market we are in now. Additionally, all of these four income-generating plays cheap I really want a lot today 20% or more price increase from them the following year. Click here to share my proven CEF investment strategy and Give us the chance to download this exclusive report for free. This report reveals the names and tickers of the top CEFs paying 9.1%..
See also
• Warren Buffett dividend stocks
• Dividend Growth Stocks: 25 Aristocrat
• Future Dividend Aristocrats: Top ContendersThe views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
https://www.nasdaq.com/articles/this-$7-trillion-cash-wave-is-set-to-pour-into-these-10-dividends This $7 Trillion ‘Cashwave’ Will Be Poured Into Over 10% Dividends