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One of the easiest ways to beat the stock market over the last 10 years has been bond CEFs. Many of these investments have produced an average annual return of 8% during this period. With interest rates low and not expected to increase until maybe 2013 or later, these bond CEFs are an attractive way to avoid the stock market swings. These CEFs have a negative beta so they will move opposite of the market and their distributions will remain stable. The list below identifies 5 CEFs with a distribution rate of 10% or more paying monthly income.

Credit Suisse High Yield Bond Fund (NYSEMKT:DHY) will invest at least 65% of its total assets in fixed income securities of US issuers rated below investment grade quality or in unrated income securities that are judged to be of comparable quality. The primary objective is to seek high current income with a secondary objective of capital appreciation. Up to 30% of its total assets may be invested in securities of issuers domiciled outside the US or that are denominated in various foreign currencies or multinational foreign currency units. It may use leverage and derivative financial instruments.

DHY is a low priced CEF trading at $2.94, a small premium of 6% to NAV. It has a one-year market return of 14% with a three-year return of 26%. Compared to the S&P 500 flat return over the last 10 years, DHY has an average annual market return of 8%. Also, DHY has a one-year beta of -1.57 which offsets the movement seen in stocks. DHY has a distribution yield of 10.7% paid on a monthly basis. DHY does not utilize return of capital in its distributions.

Wells Fargo Advantage Income Opportunities Fund (NYSEMKT:EAD) has a primary objective to seek a high level of current income. As a secondary objective, it may also seek capital appreciation consistent with its investment objective. Normally it invests at least 80% of its total assets in below investment grade debt securities, loans and preferred stocks. It will not invest more than 20% of its total assets in convertible instruments. Up to 10% of its total assets may be invested in futures and options on securities and indices and in other derivatives.

EAD is a trading at $9.82, a small premium of 5.36% to NAV. It has a one-year market return of 17% with a three-year return of 22%. EAD has a one-year beta of -0.63 with an adjusted expense ratio of 0.98. EAD has a distribution yield of 10.4% paid on a monthly basis. EAD does not utilize return of capital in its distributions but has a total leverage of 26%.

First Trust Mortgage Income Fund (NYSE:FMY) is a diversified investment company that seeks a high level of current income. As a secondary objective it seeks to preserve capital. It will invest primarily in mortgage-backed securities (MBS) of residential and commercial loans. These securities may be issued by government agencies, private originators or issuers, in the form of pass-through certificates, collateralized mortgage obligations, residential mortgage-backed securities or commercial mortgage-backed securities. Normally it will invest at least 80% of its managed assets in MBS. It may invest up to 20% in US government securities, or cash or other short-term instruments, and may invest up to 10% in other mortgage-related assets that represent interest in real estate. It will invest all of its managed assets in investment grade quality securities that are rated within the three highest investment grades.

FMY is a trading at $18.72, a small premium of 4.82% to NAV. It has a one-year market return of 10.5% with a three-year return of 16.8%. FMY has a one-year beta of -0.38 with an adjusted expense ratio of 1.95 which is on the high side. FMY has a distribution yield of 10.2% paid on a monthly basis. FMY does not utilize return of capital in its distributions.

Helios Total Return Fund, Inc. (NYSE:HTR) is a diversified fund with an investment objective to provide a high level of total return, including short and long-term capital gains, and a high level of current income. It invests principally in US Treasury, mortgage-backed securities, asset-backed securities, and high yield corporate securities.

HTR is a trading at $5.61, a small discount of 1.6% to NAV. It has a one-year market return of 11.52% with a three-year return of 22.3%. HTR has a 10 year average annual return of 7.26% per year. HTR has a one-year beta of -1.14 with an adjusted expense ratio of 1.23. HTR has a distribution yield of 10.2% paid on a monthly basis. HTR does not utilize return of capital in its distributions.

American Select Portfolio, Inc. (NYSE:SLA) invests primarily in mortgage-related assets that directly or indirectly represent a participation in or are secured by and payable from mortgage loans. It may also invest in asset-backed securities, U.S. government securities, corporate-debt securities, municipal obligations, unregistered securities and mortgage-servicing rights.

What is most impressive about SLA is that it did not get murdered in the financial crisis of 2008 as it held steady throughout this period with a slight price decline. SLA is a trading at $9.86, with a significant discount of 13.4% to NAV. It has a one-year market return of 7.7% with a three-year return of 10.15%. SLA has a 10 year average annual return of 6.67% per year. SLA has a distribution yield of 10.1% paid on a monthly basis.

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Source: 5 CEFs With 10% Or More Distribution Yields