CEF Report August 2022 - CEFs Continue In Rally Mode, But For How Long?

Aug. 24, 2022 7:00 AM ET, , , , , , , , , , , , , , , 8 Comments

Summary

  • Risk assets continue to rebound with investors focusing on the potential of a Fed pivot given slower growth and inflation.
  • We think we will shift from a stagflationary economic regime to a deflationary bust one. That means adding duration and quality.
  • What are the best opportunities today and what sectors should we be focused on?
  • We think the investment grade, preferreds, and muni sectors offer up those attributes we think will be positioned well for our narrative in the next six months.
  • We also like loans in taxables given the possibility that inflation sticks around longer than expected.
  • Looking for a helping hand in the market? Members of Yield Hunting: Alt Inc Opps get exclusive ideas and guidance to navigate any climate. Learn More »

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(This report was first issued to members of Yield Hunting on Aug 11th).

CEFs continue their recovery but have a long way to go. The good thing is that reinvested distributions are buying much higher yields. Given the

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This article was written by

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Alpha Gen Capital is a former financial advisor and his analysis is meant to provide a relatively safer income stream with CEFs and mutual funds. He has been writing about investing on Seeking Alpha for the past decade and he aims to help investors better understand how to properly construct a portfolio.

Alpha Gen Capital leads the Investing Group Yield Hunting: Alt Inc Opps, where along with his team of analysts, he focuses on closed-end funds and getting yield from bonds to complement dividend portfolios. The service is dedicated to income investors who are searching for yield without the high risk of the equity market. Additionally, they provide 4 actively managed portfolios.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ARDC, DSM, XFTL, PTA, WDI, WEA, FINS either through stock ownership, options, or other derivatives. 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.

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ARDC--
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BTA--
BlackRock Long-Term Municipal Advantage Trust
DMB--
BNY Mellon Municipal Bond Infrastructure Fund, Inc.
FINS--
Angel Oak Financial Strats Income Term
FMN--
Federated Hermes Premier Municipal Inc

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