THQ: Steady And Reliable Fund

Summary

  • THQ has remained a steady healthcare-related fund to invest in since its inception.
  • The fund provides an attractive and an achievable monthly distribution.
  • Investing in healthcare still makes sense as we aren't in the clear of this pandemic heading into the winter months.
  • This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Get started today »

Written by Nick Ackerman, co-produced by Stanford Chemist

Tekla Healthcare Opportunities Fund (NYSE:THQ) has been providing investors a steady distribution since its inception. This has been the case even through the March market collapse. Healthcare remains a relatively attractive area to invest in while the world deals with the pandemic on a daily basis. The large and stable companies held within THQ represent a stable area to invest in. This leaves one being sheltered from more volatility areas of the market and providing diversification.

(Source)

THQ has an investment objective to "seek current income and long-term capital appreciation." It attempts to achieve this through "a versatile growth and income investment strategy investing across all healthcare sub-sectors and across a company's full capital structure."

For THQ, it primarily invests in common stocks - though convertible and non-convertible notes also represent a meaningful allocation. Additionally, while the emphasis is on "across all healthcare sub-sectors;" the portfolio leans heaviest in pharmaceuticals that can be relatively more defensive. Though healthcare more broadly is defensive in nature due to the comparably stable nature of the business.

The fund is sizeable at just over $1.06 billion in managed assets. Increasing the risk from a comparable ETF is the fact that the fund does utilize leverage. Currently, this comes out to around 21.08% of assets. This is rather low, especially when considering the more stable investments of healthcare. That being said, we did see the damaging effects of leverage during March's selloff, when everything tanked.

The fund's expense ratio comes to 1.49%. When including the leverage expenses, this increases to 2.22%.

Performance - Attractive Returns From A Monthly Dividend CEF

Since its inception, THQ has put up respectable returns. Being involved in the healthcare sector means that it has had to maneuver through political heat on pharmaceutical drug pricing. The

Data by YCharts

Profitable CEF and ETF income and arbitrage ideas

https://static.seekingalpha.com/uploads/2019/5/2/27546953-15567808556447084.pngAt the CEF/ETF Income Laboratory, we manage ~8%-yielding closed-end fund (CEF) and exchange-traded fund (ETF) portfolios to make income investing easy for you. Check out what our members have to say about our service.

To see all that our exclusive membership has to offer, sign up for a free trial by clicking on the button below!

This article was written by

Nick Ackerman profile picture
11.45K Followers
CEF/ETF income and arbitrage strategies, 8%+ portfolio yields
Nick Ackerman is an avid student of the markets and has been investing in his own accounts for over 14 years. He is a former Financial Advisor and has previously qualified for holding Series 7 and Series 66 licenses. These licenses also specifically qualified him for the role of Registered Investment Adviser (RIA), i.e., he was registered as a fiduciary and could manage assets for a fee and give advice. Since then he has continued with his passion for investing through writing for Seeking Alpha, providing his knowledge, opinions, and insights of the investing world. His specific focus is on closed-end funds as an attractive way to achieve income as well as general financial planning strategies towards achieving one’s long term financial goals.

---------------------------------------------------------------------------------------------------------------

I provide my work regularly to CEF/ETF Income Laboratory with articles that have an exclusivity period, this is noted in such articles. CEF/ETF Income Laboratory is a Marketplace Service provided by Stanford Chemist, right here on Seeking Alpha.

Disclosure: I am/we are long THQ, UNH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (53)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.