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Explorer ○

How do we find a listing of 4 & 5 star closed end funds

Wanting to find a way to screen for 4 and 5 star closed end funds.

Thanks in advance.  Drewg

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Participant ○○○

Re: How do we find a listing of 4 & 5 star closed end funds

it doesn't exist.  if it did, using such list would be very dangerous.

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

            Drewg - if your local library has a subscription, Morningstar has their current ratings of many CEF’s. Individually you can also check them out. There is a long running thread of current posters holdings as a source if you want to develop a list.

             I have owned about 16 at the most for years since I am not a trader. So far I’ve received about 500k plus in leveraged dividends. Currently due to this crisis some may be attractive buys if you can withstand the extreme volatility and want to own them for yield only. PIMCO seems to be the most highly regarded in this niche. About half mine come from there. Most of theirs sell at premiums probably in recognition of their expertise in the CEF area.

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Explorer ○○○

Re: How do we find a listing of 4 & 5 star closed end funds

What JR said.

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

"I’ve received about 500k plus in leveraged dividends."

That is awesome. Great job. I am also trying to duplicate the same but I just started last year.

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

         ECEPROF - Some can’t take the principle risk, I couldn’t take dealing with the markets daily. I just wanted to make money especially early in retirement. Well I started during the bank crisis so I had 20-30% discounts. They’re a bumpy ride but I bought enough to probably provide enough income into our late 80’s or until death do us part. Lol.

          Anyway I decided to put index funds and growth stocks along with the munis in a taxable account then (pre retirement) as a reserve on reinvestment. All high yield, slow growth and most volatile in a TIRA where a value swoon at the right time would give me more control of RMD’s which as mentioned will provide enough cash for a long time.

           Our personal inflation rate right now is about 2.5% with much of that covered by SS. The CEF’s average about 8.5% with any excess to needs auto invested monthly in PONAX mostly. Just remember your in them for yield because the values fluctuate at times like these. But it would take a 3% dividend stock raising their dividend 5% a year 14+ years to be a 6%’er (72/3) unless it was reinvested. I received my initial investment back in about 8.5 years and the monthly cash is still rolling in.

           Hopefully the OP’er will find his own way. It was one of my best investment moves but not for everyone.

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds


@steelpony10 wrote:

         ECEPROF - Some can’t take the principle risk, I couldn’t take dealing with the markets daily. I just wanted to make money especially early in retirement. Well I started during the bank crisis so I had 20-30% discounts. They’re a bumpy ride but I bought enough to probably provide enough income into our late 80’s or until death do us part. Lol.

          Anyway I decided to put index funds and growth stocks along with the munis in a taxable account then (pre retirement) as a reserve on reinvestment. All high yield, slow growth and most volatile in a TIRA where a value swoon at the right time would give me more control of RMD’s which as mentioned will provide enough cash for a long time.

           Our personal inflation rate right now is about 2.5% with much of that covered by SS. The CEF’s average about 8.5% with any excess to needs auto invested monthly in PONAX mostly. Just remember your in them for yield because the values fluctuate at times like these. But it would take a 3% dividend stock raising their dividend 5% a year 14+ years to be a 6%’er (72/3) unless it was reinvested. I received my initial investment back in about 8.5 years and the monthly cash is still rolling in.

           Hopefully the OP’er will find his own way. It was one of my best investment moves but not for everyone.


LOL. That is a good one too. Thanks for sharing the experience.

My wife and I do not need income from CEFs because I have Tennessee state retirement (two life annuity) and SS (two life annuity too). But, accidentally, I discovered KIO, PCI, and other CEFs in late 2018. Then, I traded several for six months. It was not worth the time spent looking for various CEFs. Finally, I bought several thousand shares of PCI and several thousands shares of KIO from August to October. Due to reinvestment, they are growing at 0.75% to (0.83%) a month. I am not used to this type of growth in my shares with my Vanguard ETFs -2% annual growth rate. But, recently, I use the distributions to buy VTI and VDE (recently). I had 8.5% CG but I did not sell any because it is like killing the goose that lays golden eggs. Up or down, I will keep them and may buy more, when the equity comes back. In spite of the market's drop this week, my portfolio is up 0.756% this week because of the money reinvested as well as the fact that CEFs are holding.

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Explorer ○○○

Re: How do we find a listing of 4 & 5 star closed end funds

I've been in CEF'S since 2001 , now hold 18 to 20  all the good Pimco's ,EATON VANCE [ETO ETV EXG ETG] 5 muni's , RIV is my laggard , also have SCHW[24yrs] HD [34 yrs] F  [ 9yrs. ]  have huge profit in most except F , RIV, have income of $25kmo.              HAPPY  RETIREE       TERRY

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

         ECEPROF - I’am actually surprised about CEF valuations this time but they are a subset of bonds. Early on I used the excess to diversify income streams and get away from the capital gain fluctuations of the market. My wife or children wouldn’t know how and when to take profits and downward moves like these would make them catatonic. It was eventually part of a simplification automation process for us as we aged and for any future helpers if needed.

          Early on around Black Monday in the late 80’s we switched to diversifying income streams and away from letting Mr. Market define our future. It helped we handled our parents retirement portfolio that lasted 35 years with SS, a very small pension, munis, utility stocks and cash. Gave us the experience of different markets and the psychology of investors reactions at those times. I just think CEF’s should at least be part of a diverse income stream and yield is more reliable then capital gains. This was our personal solution to meet our personal goals.

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

" I just think CEF’s should at least be part of a diverse income stream and yield is more reliable then capital gains."

Amen.

I did not know these facts until March 2018. Accidentally, I stumbled upon CEFs and BDCs when I came across dividend channel in May2018. I still like BDCs but I just don't want to spend time researching as I did last year at this time. I checked one of them, AGNC yesterday because I made some money last year investing in AGNC, NEWT, GAIN, and GLAD. AGNC is at a good price now but I do not have new cash now to buy it.

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Follower ○○○

Re: How do we find a listing of 4 & 5 star closed end funds

A very simple question: where do you find CEFs in Morningstar without knowing the specific symbol?  I have a subscription to M* but cannot find a list of what CEFs they cover, analysis, etc. Can anyone help me with this?

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds


@AlwaysPassive wrote:

A very simple question: where do you find CEFs in Morningstar without knowing the specific symbol?  I have a subscription to M* but cannot find a list of what CEFs they cover, analysis, etc. Can anyone help me with this?


        I basically invested in CEF’s not to trade but to hold as the most reliable high income long term managed by professionals not me.
       
        What I did was this. On the CEF Connect site at the top is a screener for Strategy and Criteria. Within Criteria there’s a premium/discount tab. In my opinion CEF’s showing a premium and maybe a 0 to minus 5% discount may be the most valued for management. I’am willing to pay for that as are others. The 12 that we own are from that list. I’am sure it might vary over time depending on markets but PIMCO along with a few other groups are constantly on that list. The discount side matched against historical returns should work for traders. Those will generally be the 4-5 star CEF’s 

         Take your list and check it in Morningstar. My opinion is I get little additional information there though. The stars constantly change due to much shorter market movements. It would be a poor technique on it’s own along with yield chasing.  As a long term holder I have received all my initial investment back by now and dispersed that into growth. Stars and premiums mean little to me though just reliable cash flow. Some stay at premiums forever probably because of superior management. 
         
           I also check volatility over various time periods and markets in Portfolio Visualizer. Worst year, best year, Sharpe etc. as a sorter if I’am looking for an additional separator in a certain yield range.

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Follower ○○○

Re: How do we find a listing of 4

Thank you so very much for sharing your strategy. I, like you, am not interested in trading, but to hold investments as long as they make sense. I mostly invest in passive investments via ETFs, but given the current scenario with zero interest rates and the FED’s monetary policy, as a retiree, I have decided to look for other options. I have never invested in CEFs but I am willing to learn and try to use them effectively. Your strategy seems to me very solid.
Is there any book(s) that you would recommend to get a good introduction to the subject?

Sent from my iPhone
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Follower ○○

Re: How do we find a listing of 4 & 5 star closed end funds

I track about 200 CEFs in a couple of portfolios on M* (100 fund limit per portfolio).  You can customize your view to include M* ratings plus various other criteria.

Oz

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Explorer ○

Re: How do we find a listing of 4 & 5 star closed end funds

I have been investing in CEF’s for over 15 years.  My advice is to start slowly and keep it simple.  Many of us use CEFs for a reliable income stream.   For example if you have 500 shares of HPI you will receive $61.75 per month (500 X .1235 per share).  That is a distribution rate of 7.49% on a price of $19.79 per share according to www.cefconnect.com.   You will receive this monthly distribution regardless of how much or little analysis you do. HPI can make this payout to investors because of a 38.31% leverage rate. 

One path would be to pick an asset class that is not common in OEF’s.  Let’s look at Preferred stock funds.   If you go to www.cefa.com and click on Asset Classes on the left NAV bar you will see that there are 36 of them.  You can do some simple screening.  You will also see asset sizes of funds and will notice that some companies, such as Flaherty & Crumrine, Cohen & Steers, Nuveen, River North and John Hancock, have issued several Preferred stock CEF’s.

Currently I only own one Preferred CEF, HPI from John Hancock.  I started buying it in 2005.  Since then I have received nearly $11,000 in income from a $10,000 investment.  My only negative is that they cut the distribution last October from .14 to .1235.  The shares are trading at 5.49% premium, which I think is unattractive.  I would wait for a pull back or look for a Preferred CEF trading at a discount.  If a monthly payout is your main interest then Preferred CEF’s are a good asset class and place to start.

Cheers,

Dry Fly

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Frequent Contributor

Re: How do we find a listing of 4 & 5 star closed end funds

I know, I have said it before but it must be said again

High distribution's folly.  Just because something pays high distributions doesn't mean it's a good investment. Just because CEFs used to be good until 2020 it's not a guarantee to be good again.

I ran VFIAX(SP500), QQQ, PDI, PTY at PV (link)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
PTY11.06% 17.60%35.37%-9.16%-33.05% 0.650.88
PDI11.89% 14.25%22.22%-19.95%-31.95% 0.821.11
QQQ22.09% 15.08%39.23%-0.12%-16.96% 1.362.54
VFIAX(SP500)14.96% 12.87%32.33%-4.43%-19.61% 1.11.74

 

The above table shows that both CEF(PTY,PDI) performance (CAGR) was lower than SP500 + they had higher volatility than SP500 + CEFs had a terrible max draw.  QQQ had the lowest distribution but made double than PTY,PDI.

Below is an income chart that shows that PTY=blue  PDI=red had a lot more income than QQQ=yellow.  Do you want to have higher income but lower total returns + higher volatility?  I don't.

The only thing that matters is total returns which includes everything (income too).

Sure, I know, you are diversified and own stocks too, the main questions are

1) Is Joe the average retiree must have CEFs?   

2) What % should he have

3) Should the average Joe trade CEFs or not?

qqq.PNG

 

I'm not sure exactly how much income I made on my bond OEFs but it's several hundred thousands in just 10 years.

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Employee
Employee

Re: How do we find a listing of 4 & 5 star closed end funds

For most we invest in Closed End Funds in order to generate income.  If you are looking for CEF's to invest in my suggestion is to look at a history of distributions for the last 10 years (2010 - 2020) and only choose funds that have either increased or stayed the same in there distribution policy.  The issue with a large swath of CEF's is they cut distributions over time and have high expense ratios.

I looked at about 70+ CEF's and only about 30 did not cut distributions.  Here is my list of current CEF's that did not cut distributions over 10 yrs:

AVK,BIT,BME,BST,BUI,CGO,CHW,CSQ,DNP,DSL,ETG,ETV,FOF,GOF,HTD,KIO,PCI,PCM,PCN,PDI,PDT,PFL,PKO,PTY,RFI,RNP,RQI,THQ,THW,UTF,UTG

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Follower ○○

Re: How do we find a listing of 4 & 5 star closed end funds

While I like your list, some were not in existence in 2010.

Oz

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Employee
Employee

Re: How do we find a listing of 4 & 5 star closed end funds


@Oz wrote:

While I like your list, some were not in existence in 2010.

Oz


I agree.. What I was trying to say to anyone looking as CEF as an investment option is too look at the distribution history.  I went back 10 years (which some did not exist 10 years ago) to see which funds kept the same distribution (or increased)..  This should be one of the factors when looking at income investing Vs. those that do growth investing.

My opinion if one is to do income investing is diversify risk by utilizing closed end funds, Stocks, and ETFs..

 

 

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Follower ○○

Re: How do we find a listing of 4 & 5 star closed end funds

I track approx 200 CEFs with M* portfolios, customize the "View" and import data for the 1, 3, 5, 10 & 15 yr periods.  I then interrogate these numbers to see if each value exceeds 8% (my goal) for each time period.  I also compare the values to the same for SPY.  For month ending 8/31 there were 14 CEFs that I track that exceeded the 8% criteria and one that beat the SPY (ASG).

Unfortunately, this leaves out a lot of great funds IMO.

Oz

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