CEFS: This ETF Holds CEFS, Pays Monthly Plus Year-End Bonuses

Damon Judd
7.6K Followers
(12min)

Summary

  • Saba Closed-End Funds ETF offers high monthly income and capital appreciation by investing in discounted CEFs, actively managed by Saba Capital's activist strategy.
  • Recent activism, especially with BlackRock CEFs, has successfully narrowed discounts and boosted returns, but future gains from activism may be limited.
  • CEFS outperforms peer funds and maintains consistent distributions, but risks include interest rate hedges and the potential widening of CEF discounts in corrections.
  • Given current valuations and narrowing discounts, I rate CEFS a Hold and recommend watching for a better entry point during a market pullback.

Annual adjustment cap was written on the wooden surface. Finance and mortgage.

Caner CIFTCI/iStock via Getty Images

If you are interested in investing for passive income and have heard about CEFs (closed-end funds) and ETFs (exchange-traded funds) that offer high-yield distributions on a monthly basis, but don’t know where to start, you may want to consider opening

This article was written by

7.6K Followers
Now retired, I am an income-oriented investor seeking high yield income to support my lifestyle in retirement.I became deeply interested in the stock market beginning in late 2007 (bad timing for me but worse for my uncle) when I received an unexpected inheritance. Since that time I have done considerable research and vowed to make smarter long-term investing decisions after suffering through the Great Recession with minimal losses to my inherited portfolio, after firing my financial advisor.I look for mostly dividend paying income stocks and funds (BDCs, REITs, CEFs, ETFs) that offer high yield income to increase my retirement income beyond my pension and Social Security. I also enjoy reading investment/financial and business information and following trends in technology and markets. The human psychology of markets is as fascinating and inscrutable to me as the financial side. I am not a financial advisor so please do your own due diligence before making any buy or sell decisions.“The race is not always to the swift, nor the battle to the strong, but that's the way to bet.” Damon Runyon

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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About CEFS ETF

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