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It's hard to find a reasonably safe investment with which to earn an attractive yield. But there are some interesting places from which to get paid high yields if you look at closed end funds. One of the two funds I found is invested primarily in high yield bonds, and the other is in municipal bonds. Both of these funds trade at a discount to net asset value which is an added bonus. Here are the two funds:
The Wells Fargo Advantage Multi-Sector Income Fund (NYSEMKT:ERC) is a good place to earn about 8%. This is a closed end bond fund managed by Wells Fargo (NYSE:WFC) with a current share price of about $15.11. ERC pays about 10 cents per share monthly.
The concern for many bond investors is that interest rates will rise and lower the price of certain bonds. This fund has most of its holdings in high yield bonds which are less sensitive to rising rates. This fund’s primary investment objective is to seek a high level of current income while limiting its overall exposure to rising rates. ERC has a reasonable management fee of about 1.15% and the effective leverage is around 25%. As of the 10-31-10 report the fund has about 44% of its holdings in High Yield Bonds, 23% in Asset Backed Bonds, 14% in Government Bonds, 8% in Corporate Bonds, and the rest in other bonds and cash. Because there is some diversification here, there is added safety. An additional bonus with ERC is that this fund is currently selling for a discount to net asset value which is now $16.55. This is equivalent to an 8.4% discount based on the current share price of $15.11
The Blackrock MuniYield Quality Fund (NYSE:MQY) is paying a yield of around 7%, but since this fund invests in municipal bonds which are exempt from Federal taxes, it is equivalent to about a 10.6% yield. This fund has a current share price of $13.23. MQY pays about 7.7 cents per share monthly.
Many are concerned that with all the budget issues, some municipalities will default. But those fears seem overblown as municipalities can raise tolls, fees, and other taxes to increase revenues rather than default on their bond obligations. Some well known bond investors like Bill Gross "The Bond King" of Pimco, recently purchased some of his closed end muni bond funds so it might make sense to follow experts like Mr. Gross. This Blackrock fund (MQY) has most of its holdings (about 98%) in muni bonds and the rest in cash. MQY has a reasonable management fee of about 1.2% and the effective leverage is around 41% This fund has an average duration of 9.6 years. This fund is currently selling for a small discount to net asset value which is now $13.47. This is equivalent to a 1.3% discount based on the current share price of $13.23.
When buying closed-end funds it is important to place limit orders and buy when these are trading at a discount to the net asset value. To get more information on current net asset values and other details on these funds here is a good resource.
The data is sourced from Yahoo Finance and etfconnect.com. The information and data is believed to be accurate, but no guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 2 Solid Closed-End Funds Yielding 8% Plus