MJ DeMarco
I followed the science; all I found was money.
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Closed-End funds looking mighty attractive in this market ...
First, may of them are trading at huge discounts to NAV ... some 40%.
Second, dividend yields are at all-time hight ... 30%, 40%, nutzo yields payed monthly!
However, the risk of these funds are inherent in their ability to pay dividends. A 30% dividend yield is worth zero if they can't pay it.
The first of dividend yield defaults (or as they say "postponements") occurred this week with the Pimco High Yield fund (PHK).
Here is the article:
PIMCO Floating Rate Income Fund, PIMCO Floating Rate Strategy Fund and PIMCO High Income Fund May Postpone Next Monthly Common Share Dividends: Financial News - Yahoo! Finance
After the announcement, the stock tanked. And because these are close-ended, the drop typically is more precipitous.
So those of us who are looking at CEF's because of attractive yields and discounts to NAV, be careful!!
First, may of them are trading at huge discounts to NAV ... some 40%.
Second, dividend yields are at all-time hight ... 30%, 40%, nutzo yields payed monthly!
However, the risk of these funds are inherent in their ability to pay dividends. A 30% dividend yield is worth zero if they can't pay it.
The first of dividend yield defaults (or as they say "postponements") occurred this week with the Pimco High Yield fund (PHK).
Here is the article:
PIMCO Floating Rate Income Fund, PIMCO Floating Rate Strategy Fund and PIMCO High Income Fund May Postpone Next Monthly Common Share Dividends: Financial News - Yahoo! Finance
After the announcement, the stock tanked. And because these are close-ended, the drop typically is more precipitous.
So those of us who are looking at CEF's because of attractive yields and discounts to NAV, be careful!!
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