Income Growth From 8%+ Yielding Portfolios
Summary
- Our income grew despite not adding new capital to the portfolios nor stretching for yield.
- Our Income Generator portfolio grew income by +11% in 2020.
- Our Tactical Income-100 portfolio grew income by +2% in 2020.
- Our IG and TI portfolio returned +10% and +2%, respectively.
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Both our Income Generator portfolio and our Tactical Income-100 portfolio were able to grow income in 2020, despite not adding new capital to the portfolios nor stretching for yield. That is despite a pandemic that had brought many high yield investments down. We were able to accomplish this through "double-compounding" our income through swap trades. Our members have a step-by-step guide on how to do this here: How Would You Like Your Free Shares To Be Served? (Double-Compound Your Income!)
This is also a reflection of picking some of the right funds as well. In fact, we had several names raise their distributions throughout the year several times. The Flaherty and Crumrine preferred funds all got some nice boosts throughout the year.
(Source - CEFConnect)
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Income Generator December 2020 stats
The Income Generator portfolio received a total of $1024 in distributions this month, down from $1094 from last month, as we had swapped from the higher-yielding OXLC to the lower-yielding ECC last month. This monthly distribution is lower than the corresponding period from 2019, due to the lack of special distributions this year. Despite the lack of specials this year, we still grew our income in our portfolio by +11.0% this year (from $11603 to $12882). This highlights the power of "double compounding" from distribution reinvestment as well as our CEF rotation strategy, in allowing minor distribution cuts to be overcome, as well as not stretching for yield. Remember, no new capital was committed to the portfolios at any time.
Performance for the year was +9.71%, beating the YYY (-1.20%) fund-of-CEFs benchmark.
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Tactical Income-100 December 2020 stats
The Tactical Income-100 portfolio received $1096 in distributions this month, down from $1231 last month. Overall, we've grown our income in our Tactical Income-100 portfolio by about +2% this year ($10117 to $10324). This highlights the power of "double compounding" from distribution reinvestment as well as our CEF rotation strategy, in allowing minor distribution cuts to be overcome. Remember, no new capital was committed to the portfolios at any time.
The income growth here was a bit more tempered because the portfolio added more growth. Primarily, the addition of BlackRock Science and Technology Trust II (BSTZ) and BlackRock Health Sciences Trust II (BMEZ). These lower yielders are balanced more by the opportunity for greater appreciation - which could translate into distribution growth going forward.
Performance for the Tactical Income-100 portfolio came in at +3.15% for 2020, still beating the YYY (-1.20%) fund-of-CEFs benchmark. As a more aggressive portfolio, it takes sector bets and had greater exposure to energy than our Income Generator portfolio heading into 2020.
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CEF/ETF Income Laboratory: Profitable CEF and ETF Income and Arbitrage Ideas
Whether you're a novice or experienced closed-end fund ("CEF") and exchange-traded fund ("ETF") investor, the "Income Lab" is the right place for you. Our goal is to help you benefit from income and arbitrage strategies in CEFs and ETFs, all without having to be an expert, because we do the heavy lifting for you. If that sounds like something you'd be interested in, we hope you'll consider joining us here at CEF/ETF Income Laboratory.
We would love for you to join us. We are sure that you will enjoy our service and benefit from what we have to offer!
Sincerely,
Stanford Chemist, Nick Ackerman, Alpha Male, Juan de la Hoz and Dividend Seeker
Analyst's Disclosure: I am/we are long BMEZ, BSTZ.
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.