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In today's markets, dividend paying stocks with yields above 5% are unusual. Fortunately, there are many Closed-End funds (CEFs) trading at a discount to net asset value (NAV) with dividends exceeding 5%.

Below is a table of CEFs with payouts exceeding 5%, which trade at a discount of 10% or more, and have expense ratios below 1.5%:

Closed-End Fund (Ticker)

Strategy

Distribution Yield

Discount

Expense Ratio

Eagle Capital Growth (GRF)

Core Funds

15.20%

-10.11%

1.42%

Swiss Helvetia Fund (SWZ)

Developed Market

12.18%

-13.93%

1.32%

Eaton Vance TxMgdGlDvEIn (EXG)

Opt Arb/Opt Strat

12.00%

-14.18%

1.05%

Eaton Vance T-M D-E Inc (ETY)

Opt Arb/Opt Strat

11.41%

-13.74%

1.07%

Eaton Vance R-Mgd Eq Inc (ETJ)

Opt Arb/Opt Strat

11.37%

-12.60%

1.09%

Eaton Vance Tx-Mg Gl B-W (ETW)

Opt Arb/Opt Strat

10.61%

-12.38%

1.08%

Eaton Vance T-M B-W Opps (ETV)

Opt Arb/Opt Strat

10.22%

-10.01%

1.09%

Eaton Vance Enh Eq Inc 2 (EOS)

Opt Arb/Opt Strat

9.69%

-11.09%

1.14%

Zweig Total Return (ZTR)

Income & Pref Stk

9.64%

-11.80%

0.88%

Eaton Vance Enh Eq Inc (EOI)

Opt Arb/Opt Strat

9.60%

-11.81%

1.15%

Zweig Fund (ZF)

Core Funds

8.70%

-10.37%

1.06%

Madison Str Sect Prem (MSP)

Opt Arb/Opt Strat

8.69%

-10.93%

0.98%

Morg Stan Asia-Pacific (APF)

Developed Market

8.02%

-11.34%

1.24%

Petroleum & Resources (PEO)

Sector Equity

7.51%

-12.28%

0.56%

First Tr Enh Equity Inc (FFA)

Opt Arb/Opt Strat

7.37%

-10.83%

1.22%

Liberty All-Star Equity (USA)

Core Funds

6.63%

-10.81%

1.05%

AGIC Eqty & Conv Income (NIE)

Convertible Secs

6.41%

-10.74%

1.08%

Templeton Dragon Fund (TDF)

Emerging Markets

6.19%

-10.75%

1.37%

Royce Focus Trust (FUND)

Core Funds

5.95%

-13.78%

1.33%

Royce Value Trust (RVT)

Core Funds

5.81%

-12.92%

0.98%

Adams Express Company (ADX)

Core Funds

5.73%

-13.57%

0.55%

Gabelli Div & Inc Tr (GDV)

Value Funds

5.66%

-10.67%

1.40%

Royce Micro-Cap Trust (RMT)

Core Funds

5.50%

-13.23%

1.12%

Canadian Gen Invmnts Ltd (CG.TO)

Developed Market

5.17%

-30.21%

1.30%

How do CEFs work? CEFs are mutual fund companies that buy and sell investments from a fixed pool of capital. Shares in CEFs are sold by current owners, often at prices that are lower than the sum of their holdings. When you buy a CEF, your investment pays expenses to the fund manager. The hope of CEF investors is that the return on their assets will exceed the fund manager's expenses.

There is a relationship between discount and expenses that requires some thought. A fund is not cheap just because it sells at a discount. Instead, the fund must be discounted enough so that its fees are overwhelmed by its expected returns. High dividends are especially attractive in CEFs because capital returned to investors will not be subject to fees in the future.

Many of the funds on this list return principal, not just income, to investors. This action is beneficial to investors who bought the principal at a discount. For funds with extreme discounts, income is just icing on the cake.

Careful research on each fund's holdings and management are required before investing. This list is a good launching point to determine if any of these CEFs should join top dividend stocks in your fixed-income portfolio.

Disclaimer: This article was written to provide investor information and education, and should not be construed as a guarantee or investment advice. I have no idea what your individual risk, time-horizon, and tax circumstances are: please seek the personal advice of a financial planner. This article uses third-party data and may contain approximations and errors. Please check estimates and data for yourself before investing.

Source: Closed-End Funds With Yields Over 5%