4 'Double Discounted' CEFs Yielding Up To 9.1%

 | Apr 14, 2022 05:08AM ET

There’s nothing we closed-end fund investors love more than finding a smartly run fund in an unfairly beaten-down sector. This hands us a nice discount (of course!), plus a much bigger dividend, because yields and prices move in opposite directions.

In fact, with CEFs, we’re actually getting a “double discount”: one from the depressed sector and one from the CEF’s discount to net asset value (NAV, or the value of the stocks in its portfolio). This indicator only exists with CEFs, and we’ll cover 4 with particularly attractive discounts to NAV in a second.

Plus, CEFs already boast yields that triple (or more) those of regular stocks, so deep-discounted CEFs give you an income stream that’s bigger still.

h2 Healthcare’s Slump Can’t Last. Let’s Tap it for (Monthly) Dividends Up to 9.1%/h2

These days, healthcare is hands-down the most wrongly trashed corner of the market.

Think about it: COVID-19 has thrown the need for healthcare into sharp relief. And the aging of America—a trend that was overshadowed during the pandemic—isn’t going anywhere. No wonder US healthcare spending is forecast to jump from $4.2 trillion annually in 2021 to $6.2 trillion by 2028, according to Statista.

With that in mind, the sector’s drop in 2022, as shown below by the performance of the iShares Biotechnology ETF (NASDAQ:IBB), is a terrific opportunity for us to fish for big payouts, especially since IBB has outrun the S&P 500 over the long haul:

h2 Biotech’s Recent Lag Opens Our Buy Window