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Aside from a few energy stocks, the Protected Principal Retirement Strategy portfolio has been devoid of diversified global and emerging market positions for close to a year now. That has all changed in the past few weeks!

I receive a weekly letter from a Wealth Management Group that has consistently made correct market calls, and as a result has returned double digits to its clients. They do not recommend individual stocks (unless you are a client); however, their weekly letter provides insight as to how one's portfolio should be allocated. In recent weeks they have continued to advise increased weighting of international developed markets (particularly Europe) and to begin taking conservative positions in emerging markets (small, possibly non-BRIC) and emerging market debt instruments.

Our portfolio is not in a position to purchase several stocks in each of these categories, so we have opted to research several closed-end funds [CEFs] for opportunities to purchase positions in these asset classes at a discount, while achieving a satisfactory level of diversification.

The following is a summary of our findings.

International Developed Markets

Our criteria for purchasing and holding of [CEFs] has always been to look for funds where the discount is close to the high end of its historical range, the dividend yield meets our portfolio criteria (generally eight percent or greater), and the fee structure is favorable (generally as close to one percent as possible).

Two funds were found that meet most of our criteria and whose holdings in European stocks were a significant part of their portfolios.

Wells Fargo Advisors Global Dividend Opportunities (NYSE:EOD)

EOD seeks income and capital appreciation by investing in both U.S. and global common and preferred stocks. Its fees total only 1.07 percent, it is not a leveraged fund, and does not pay a managed distribution.

At a Friday closing share price of $7.40, EOD trades at a 9.54 percent discount to its net asset value [NAV]. This is relatively close to its highest discount of 11.1 percent.

It pays a dividend of $.21 quarterly for a current yield of 11.3 percent. All of the dividend is classified as income. The fund has not performed as poorly as other global funds year-to-date, with the share price increasing by 3.3 percent and the NAV by 6.1 percent.

Approximately 67 percent of EOD's investments are in equities and 20 percent are in preferred stocks. Although 48 percent of its investments are in the U.S., the balance is spread around Europe, including the U.K., Germany, Sweden and Norway - some of the more solid economies on the continent.

I believe that over the coming 12 months, the discount can return to its historic low level around three percent, which could result in a share price close to the $10 mark.

Eaton Vance Tax-Managed Global Fund (NYSE:EXG)

EXG also has the objective of providing income and capital appreciation, and in addition uses options as a means to enhance distributions. Its fees total 1.05 percent, EXG is not leveraged but does provide a monthly managed distribution.

On this past Friday, EXG closed at $9.49, and is presently trading at a discount to [NAV] of 8.84 percent. This is not that close to its historic high discount of over 15 percent. However, the other fund fundamentals (to me) outweigh its not meeting this specific criteria.

EXG currently pays a dividend of $.0813 monthly for a yield of 10.26 percent. Most of this is a return of capital - fairly typical for those CEFs involved in options strategies. Year-to-date, EXG has been an exemplary performer, with its share price increasing by 15.4 percent, and its [NAV] by 7.5 percent.

EXG's holdings are spread primarily across several of the stronger European economies - including Switzerland, Germany, Denmark and Sweden. In addition, it has stock positions in Australia and Japan.

It is my belief that the present levels of return can continue if Europe continues to recover, and the fund price could continue into the low double digit levels.

Emerging Markets

My [CEF] screening has identified two emerging market funds of interest, one an equity fund, and the second a fund invested in emerging market debt instruments.

ING Emerging Market High Dividend (NYSE:IHD)

IHD has as its objective high total returns through investments in emerging markets. Fees are a bit high at 1.44 percent, it is not presently using leverage and it pays quarterly distributions.

With a closing price of $12.28, IHD trades at a very rare 2.46 percent discount to [NAV]. This is only the second period in a year when it has traded at a discount.

IHD pays a quarterly dividend of $.36, all of which is income, and has a present yield of 11.72 percent. For the year-to-date IHD's price has declined 11.4 percent and the [NAV] has dropped 8.8 percent. This is in line with the performance of all emerging markets funds.

IHD presently is invested 87 percent in equities and 12 percent in short-term instruments. Currnet stock holdings consist of positions in China, Brazil, S. Korea, Taiwan, Russia, S. Africa and other smaller markets.

If IHD were to return to its former premium levels as result of a recovery in emerging markets, I believe that we could see a price back into the mid-teens.

Western Asset Worldwide Income (NYSE:SBW)

The investment objective of SBW is to achieve high current income by investments in high yield government debt securities. It carries a fee of 1.23 percent, uses low leverage (four percent), and pays a monthly managed distribution.

At Friday's closing price of $12.01, it is trading at a discount of 13 percent to [NAV]. This is just under its highest discount level of 14 percent.

The monthly dividend of $.084 equates to a yield of 8.44 percent, and the distribution consists mostly of income, and also short - and long-term gains. Year-to-date, SBW's price is down 17.1 percent and its [NAV] has declined 11.6 percent, again in line with the universe of emerging markets funds.

It is invested 61 percent in foreign government bonds and 42 percent in foreign corporate bonds. The total of 103 percent accounts for its leverage. Some of the smaller emerging markets that SBW is invested in include: Peru, Indonesia, Columbia and Poland, among others.

Assuming that the discount drops to SBW's average discount of 5.4 percent, and assuming that emerging markets rebound as expected, I believe we could see the stock price in the upper mid-teens.

Summary

I am particularly bullish on both EOD and EXG, to the extent that I recently initiated small positions in the Protected Principal Retirement Strategy portfolio. At this time I am closely watching both IHD and SBW, and might begin buying IHD this coming week.

A word of caution. I would overweight the global funds by about a three to one ratio to the emerging market positions.

Source: Protected Principal Retirement Strategy: Back In The Saddle Again

Additional disclosure: This article does not constitute either a buy or sell recommendation for any of the funds mentioned.