ERH: This Fund Presents An Interesting Opportunity For Income Investors

Summary

• The Allspring Utilities and High Income Fund is an underfollowed closed-end fund that invests in a 70/30 portfolio of utility equities and junk bonds.
• The fund has beaten the S&P 500 Index since March on a total return basis, which is impressive for a utility-focused fund.
• Utilities are probably better than junk bonds for investors due to junk bonds only having a very low after-tax yield in an environment of rising inflation.
• The fund pays an 8.15% distribution yield, which was fully covered in the most recent fiscal year.
• The fund is currently trading at a fairly attractive valuation relative to its historical average and its peers.
• I do much more than just articles at Energy Profits in Dividends: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of CSQ 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.