In the universe of higher yield stock investing, often no news is good news. Income stock investors want to own shares that pay steady dividends from companies that can be counted on to earn enough to cover the dividends quarter after quarter.

Stock market drama usually leads to share price volatility, which is something that makes dividend investors uncomfortable. As a result, often the best dividend stocks don’t make much news in the financial news, which makes it harder for investors to find them.

One group that gets little press but pays steady dividends and attractive yields are the small cadre group of commercial mortgage finance real estate investment trusts (REITs).

REITs are divided into two broad categories. Equity REITs own commercial properties. They earn revenue from rent or lease payments. Finance REITs originate or own portfolios of real estate secured loans. The residential focused REITs usually own highly leveraged portfolios of mortgage-backed securities (MBS).

Commercial finance REITs typically originate loans on commercial properties and hold them in their own portfolios. Commercial finance REITs contrast starkly compared to the more popular residential MBS owning REITs. They are less leveraged, financially more conservative, and have better dividend track records. 

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Commercial finance REITs are lower risk and historically have been more stable dividend payers. Commercial mortgages are typically done with variable interest rates, and commercial REITs match their loans with variable debt. They lock in the interest rate spreads, no matter which way interest rates move. These REITs also use a lot less leverage than their residential MBS owning cousins.

If you are looking for 7% to 8% yields where you can count on the dividends for years to come, consider commercial finance REITs. Here are three that I’ve been following for years to get you started.

Blackstone Mortgage Trust, Inc. (BXMT) is a pure commercial mortgage lender. The REIT receives high-quality mortgage lending leads from its sponsor, The Blackstone Group L.P. (BX).

As of its 2019 third-quarter earnings, BXMT had a $16.4 billion portfolio of senior mortgage loans.

In the quarter, the company originated $3.7 billion of new senior loans and received about $3 billion of principal paybacks. 94% of the portfolio is floating rate.

The loans were at 62% loan to the value of the underlying properties. Leverage is 2.8 times debt to equity.

The stock currently yields 6.8%.

Ladder Capital Corp (LADR) uses a three-prong approach to its investment portfolio. The three legs are commercial mortgage loans, with a current $3.4 billion portfolio of floating and fixed-rate loans, commercial real estate equity investments, valued at $981 million, and commercial MBS bonds, worth $1.9 billion.

The business plan is that the three groups cycle to more or less attractive through the commercial real estate cycle, each being more attractive at different phases of the cycle.

Leverage is a comfortable 2.6 times.

Since it paid its first dividend for Q1 2015, Ladder has steadily increased the quarterly payout at an average 5% annual growth rate.

The shares currently yield 8.0%.

Starwood Property Trust, Inc. (STWD) is one of the largest commercial lenders of any business type – including banks. The company currently has an $8.0 billion loan portfolio with a 65% loan to value.

Since launching in 2009, the company has deployed over $40 billion in loans and investments with zero realized losses.

In recent years, Starwood has acquired the largest commercial mortgage special servicer. This acquisition has led to growth in CMBS origination and investments.

The company also owns a $2.7 billion equity commercial property portfolio that generates 9% to 12% cash on cash returns. Recently Starwood has invested in non-agency residential MBS.

The $1.2 billion RMBS portfolio has a 68% loan to value. Management constantly looks for investment opportunities both in and out of the commercial mortgage business.

STWD current yields 7.9%.

On Saturday, September 14, Saudi Arabia’s largest crude oil processing facility at Abqaiq, was attacked by at least 30 drones and cruise missiles. The attack shut down about one-half of the country’s oil production capacity, which is 5% of the world’s daily production and consumption. When trading markets opened on Monday, crude oil prices jumped by 14%.

However, within a couple of days, crude was back trading at just a couple of dollars per barrel above the pre-attack price. I am shocked that the markets are that unconcerned about an attack that shut down 5% of the world’s oil supply.

The reason that crude oil, which saw WTI peak at almost $63 on Monday, is back trading in the high $50s is that Saudi Aramco management has promised to get the lost production quickly back online. From what I have read, this may not be feasible.

It is my opinion that Saudi Arabia will sell oil from its reserves and try to get Abqaiq back up to full capacity in a few weeks. This may be very, as in too, optimistic and the country could quickly exhaust its reserves and leave the world supply with a continuing shortage with a much smaller safety net.

Related: What’s In Store For Oil Now That Half of Saudi Arabia’s Production is Offline?

Another concern is that oil traders seem to be completely ignoring the potential for another attack. I am a former Air Force pilot, and my thoughts are that when the attackers see that 30 drones and cruise missiles didn’t get the job finished, I would start to ready the next one with 60 drones and missiles.

The powers behind the first attack want to shut down the capitalist world. The capitalists trading oil seem to have blinders on that their way of life has been attacked.

I think the world of oil traders is insulated from the dangers of the world and are underpricing the risks to crude oil. There is a strong possibility of another event that will drive the price of a barrel of crude much higher, and the next time it will stay higher. Here are three dividend-paying stocks that would benefit from higher oil prices.

Royal Dutch Shell (RDS.A) (RDS.B) is a global energy producer that would be a significant beneficiary of another or continued production reductions out of Saudi Arabia.

The company is truly a global producer with production areas in the Gulf of Mexico, Canada, Norway, Malaysia, Nigeria, Brazil, and Russia.

Royal Dutch Shell appears to be a prime player to provide oil to end-users that find they are not getting what they need from Saudi Arabia.

RDS shares currently yield 6.4%.

Occidental Petroleum Corp. (OXY) is a crude oil and natural gas production company whose share price is down 40% since it announced earlier this year that the company would acquire Anadarko Petroleum Corp. The merger is now complete. OXY is a global energy producer with a large footprint in the U.S. Permian, Rockies and Gulf of Mexico production areas.

The U.S., especially the Permian, is where most of the world’s crude oil production growth is being fueled.

Higher oil prices will allow the Permian and other U.S. production areas to ramp up their growth further.

OXY shares currently yield 7.0%.

Plains All American Pipeline LP (PAA) is a master limited partnership (MLP) that owns the largest independent crude oil pipeline and storage network in the U.S.

The company is a major mover of crude oil out of the Permian.

The company has additional pipelines under development and typically partners with crude oil end users as partners in any new projects.

While the company doesn’t count on the results of its Logistics Division to support the dividend, this trading business can generate huge profits when energy prices get disrupted.

PAA currently yields 6.6%.

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Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

I feel like we have moved into a Dr. Strangelove type of financial world. The economic data shows that the U.S. economy is doing fine. We have growth in the economy, low unemployment, and rising wages.

Home prices continue to increase. In contrast, on the financial markets side of the universe, traders are pushing bond prices, making yields and stock prices act like the next Great Recession starts on Friday.

One effect of this schizoid financial world is the new existence of dividend stocks, with solid cash flow coverage and actual dividend growth trading with yields of 12%, 15%, even 18%.

Energy is one economic and stock market sector that has been hit hard by the fears of an economic slowdown or possible recession. The Energy Select Sector SPDR (XLE) is down 18% from its 2019 high.

The sector is trading like the world is going to stop driving vehicles, turning on the lights, or running their air conditioners. Fundamental analysis and logic have no place in the current fear-driven energy stocks investor strategy.

One of the effects of this sell-off is that you now have energy midstream companies trading to pay tremendous dividend yields. The midstream sector provides the transport, storage, and other services to get oil and natural gas from the production plays to the refineries and power companies that consume the energy commodities.

Midstream companies deliver their services on long-term fixed-fee contracts. Interstate pipelines have rates set by the Federal Energy Regulatory Commission, with built-in annual rate increases.

Shippers on pipelines and users of energy storage commit to minimum volumes, so the midstream revenues are very predictable and growing. With stable, predictable cash flows, most energy midstream companies pay out most of their free cash flow as dividends. This is a business sector where income-focused investors can earn attractive returns.

The 2019 energy sector crash has not exempted these solid dividend-paying companies. Many have fallen harder and farther than the stocks of energy companies whose profits are dependent on the prices of energy commodities. Go figure.

As a result, there are midstream companies with solid revenue and cash flow stream, long term records of growth and even growing dividends that currently sport yields from the low teens up into the high teens. Maybe the market is right, and the next recession starts tomorrow. Or perhaps it’s wrong, and this is a once in a decade opportunity for income-focused investors.

Here are three midstream stocks with very high yields. Do your research and decide if these companies will be able to continue to pay dividends. I did mine and I think, yes.

CNX Midstream Partners LP (CNXM) is a master limited partnership (MLP) that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. The midstream company is sponsored and controlled by upstream energy producer CNX Resources Corp (CNX).

At least a portion of CNXM revenues are dependent on production growth by CNX. In its second-quarter earnings notes, CNX increased their 2019 production guidance, with 12% annual growth predicted. CNXM has been growing distributions paid to investors by 15% per year.

Distributable cash flow (DCF) coverage is a strong 1.6 times the distribution. This MLP will increase its payout every quarter and currently yields 11%.

EnLink Midstream LLC (ENLC) provides midstream services for natural gas, crude oil, condensate, and NGL commodities. The company has its assets in premier production basins and core demand centers, including the Permian Basin, Oklahoma, North Texas, Ohio River Valley, and the Gulf Coast.

EnLink Midstream was created by Devon Energy Corp. (DVN).

A year ago, Devon sold its interest in ENLC to privately held Global Infrastructure Partners (GIP). This has produced investor uncertainty about the future of EnLink.

Company management has given guidance of 6% annual dividend growth with 1.3 times DCF coverage. That is very solid in the midstream world.

ENLC shares yield 15%.

Antero Midstream Corp. (AM) is another midstream services provider focused on natural gas gathering and other midstream services in the Appalachian Basin. AM primarily provides its services to upstream producer Antero Resources (AR).

Early in the year, the current version of Antero Midstream was formed with the merger of an MLP and its publicly traded general partner. A good move for investors.

Recently Antero Resources had a Board of Directors take over by the former heads of Rice Energy, which was acquired by Antero in 2017.

Despite solid growth plans for this year and future years from both companies, the corporate turmoil has investors dumping shares driving down prices.

AM has been growing its dividend every quarter yet is priced to yield an astounding 18%.

Over the last five years I have developed what I view as the core to The Dividend Hunter investing philosophy and strategy. My recommendations on how to build and manage an income focused stock portfolio is a very different path compared to from mainstream investment advice, which is concerned with entry prices, exit prices and stop losses. It is my opinion from years of experience, that market timing strategies are a tough way to make money and an easy way to lose significant portions of a nest egg.

My philosophy with my Dividend Hunter newsletter, and really all dividend stocks that I research, is that shares of stock are purchased to start, maintain and build an income stream. This leads to the first rule of being a dividend focused investor:

• You can’t earn dividends unless you own shares of stock. This means to get started you buy shares and don’t wait for a timing signal.

This fact leads to the corollary that as Dividend Hunters we will always own shares. Through down markets and up. Which gives us rule 1A:

• We measure investment results by tracking the dividend income earned each quarter and each year.

Dividend earnings are the one facet of stock market values over which investors have the most control. If you can build a dividend income stream that is stable to growing year after year, your principal value will be fine in the long run.

A focus on building an income stream lets us be willing to buy shares when prices are down, and others are fearful. Dividend Hunters can also take profits on stocks that have done well, and the sales proceeds can be used to enhance the income stream.

To be a successful Dividend Hunter I recommend that you work towards these goals:

• Build a portfolio that includes all the stocks on the recommendations list. I developed the list to provide as much diversification as possible while still generating a high dividend yield.
• Have your own strategy on how much weight you want in each stock. It is OK to overweigh some stocks or types of stocks if that is part of your strategy. We all have favorites. However, the strategy must push you to buy all the Dividend Hunter stocks when the holdings get out of balance with your plan. Personally, I keep it simple and aim to own a balanced dollar amount of each stock.
• Your plan should include the reinvestment of at least a portion of your dividend earnings. If you are in the building your portfolio stage, 100% of the dividends can be reinvested. With an 8% average yield on the Dividend Hunter stocks, this will grow your dividend income by 8% plus per year. If you are drawing an income, don’t take all your dividends. Reinvest 20% to 25% of your earnings to keep the dividend stream growing.
• Have a system to track your dividend income. Most brokerage accounts don’t include dividends in their return calculations. When you know how much you earned each quarter and can see the stability and growth of your income stream, the Dividend Hunter system makes sense. It will give you peace of mind that you are on the right path. (You should check out the online tracker I helped build: click here for details.)

Finally, when one of our stocks goes into a steep decline, I will closely analyze the company to evaluate its ability to generate the cash to support the dividend. If the dividend looks secure, we are comfortable adding at a lower share price to increase our portfolio yield.

The stock market has racked up high returns for the first half of 2019. The second-quarter corporate earnings reports so far have not been stellar. So far it’s tough to envision a scenario where the major stock indexes tack on another 10% to 15% in gains for the second half of the year. I think it’s likely that what performs well in the second half of 2019 will be much different from what made investors money in the first half.

While growth stocks have done well so far this year, a lot of high-yield stocks have lagged the major market indexes. High-yield is a different world. The primary investor concern is whether a company can continue to pay those big dividends. High-yield comes with what I call the binary outcome potential. On one side is the company will continue to pay the dividend.

This is the desired outcome, and the significant yield becomes your expected return. The flip side is the dividend cut the market has priced into the shares. A high-yield is the indicator that the market has built in the probability of a dividend reduction. A dividend reduction cuts twice, first your income gets reduced, and second, the reduction usually produces a significant share price drop.

Your goal as an income stock investor is to seek out higher yield stocks where you have conviction the dividend is secure. If you can find stocks with 10% plus yields and the dividends keep coming, you have a good chance to outperform the stock market for the rest of 2019. To find “good” high yield stocks, you need to understand how the individual companies generate cash flow to pay the dividends.

Further, you’ll need to monitor each company every quarter to make sure the dividend is secure. If you like high-yield, but don’t want to become a corporate accountant or Wall Street analyst, consider signing up for my Dividend Hunter service.

To get you started, here are three stocks with yields over 10% where currently the dividend looks secure. They are good ideas for where to begin your research.

GasLog Partners LP (GLOP) is a publicly-traded partnership that owns a fleet of 15 liquid natural gas (LNG) carrier vessels. Most of the fleet is on long term lease to Royal Dutch Shell plc (RDS.A). The leases provide predictable cash flow, and even with its high yield, GLOP has been growing its dividend by 3% to 5% each year.

The danger is that dividend coverage is very tight, with a first-quarter distributable cash flow of just 1.03 times the dividend. Global LNG trade is a growth business, which is positive for the long-term success of GasLog Partners. The stock currently yields 10.1%.

Global Net Lease (GNL) is a $1.6 billion market cap real estate investment trust (REIT). The company focuses on sale/leaseback transactions, where it buys commercial properties and leases them back on triple-net leases to the selling company.

Portfolio properties are evenly split between the U.S. and Europe, with 55% of the portfolio being office buildings. The danger for GNL is after the initial lease period expires if the tenant company doesn’t renew, the expense to retrofit and release will be very high. The shares currently yield 11,2%.

New Residential Investment Company (NRZ) is a finance REIT which has operations in the various phases of the residential mortgage market. Its primary investments are in mortgage servicing rights (MSR). These are fee stream paid on every individual residential mortgage.

The danger to NRZ is that high refinancing activity will deplete the MSR payments stream. To counter this, New Residential has diversified into other sectors of the mortgage business. The shares currently yield 13.1%.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

July marks the start of the 2019 third quarter, and in a few weeks, earnings season starts, with a flood of quarterly earnings reports. With income stocks, quarterly earnings often are closely led or followed by dividend announcements.

Common stock dividends are note sure things until they are announced. It’s even better when a dividend announcement comes with a payout rate increase.

If you expect a dividend increase is coming soon, you can put the stock on your watch list to pick up shares during any price dip in the weeks leading up to the announcement date. Today I am giving you lead time warning on some projected dividend increases for next month.

Real estate investment trusts (REITs) pay attractive current yields and regularly increase their dividend rates. I maintain a database of about 140 REITs, out of which about 100 have histories of dividend growth.

Most of these companies increase the quarterly dividend once a year, and then pay the new rate for the next four quarters. Even though individual REITs increase their dividends just once a year, those announcements are spread across almost every month of the year.

To capture those share price gains, you want to buy shares a few weeks to a month before the next dividend increase announcement is published. Now in early July, it is a great time to look at those REITs that should increase dividends in August.

Here are a few REITs from my database that historically have boosted their payouts in August.

Federal Realty Investment Trust (FRT) is a $10 billion market cap REIT that owns, operates, and redevelops high quality retail real estate in the country’s best markets.

FRT has increased its dividend for over 50 consecutive years, the longest growth streak of any REIT. Over the last 5 years, the average annual dividend increase has been 6%. Last year the dividend was increased by 2.0%. Based on management guidance, an increase close to the 5% annual average is in the cards for this year.

The company announces its new dividend rate in early August. The ex-dividend date will be in mid-September with payment about a week later.

This is a very high-quality REIT. The stock yields 3.1%.

Eastgroup Properties Inc. (EGP) is a $4.3 billion market value REIT that focuses on development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis on the states of Florida, Texas, Arizona, California and North Carolina.

The industrial properties sector is currently one of the best performing real estate sectors.

The company has increased its dividend for 23 of the last 26 years, including the last seven in a row. Last year the payout was increased by 12%. This year my forecast is for a 5% to 7% increase.

The new dividend rate should be announced in late August or early September, with a mid-September ex-dividend date and end of the month payment date.

EGP yields 2.5%.

Healthcare Trust of America, Inc. (HTA) is a $5.7 billion REIT that acquires, owns and operates medical office buildings. The company reduced its dividend in 2012 and 2013, which was followed by small increases in each of the next four years.

Last year the dividend was bumped up by 1.7%; comparable to the increase of the previous year. In 2018, the funds available for distribution per share increased by 1.2%, and for the 2019 first quarter, FAD per share was flat compared to a year earlier.

Management has been very conservative with the dividend growth and I expect a small increase comparable to the last couple of years. Last year the new dividend rate was announced in early August, with an end of September ex-dividend date and early October payment date.

The stock currently yields 4.5%.

Bonus Recommendation:

Weyerhaeuser Company (WY) is a $20 billion market cap company that converted to REIT status in 2010. The company owns forest land and generates revenue by harvesting trees and processing the trees into lumber and pulpwood products.

Since the REIT conversion, the dividend has steadily increased, but not on a regular schedule. The current rate has been paid for four quarters, so an increase is due with the next announcement.

Last year the WY dividend increased by 6.3%. The next dividend announcement will be in late August with mid-September record date and end of September payment.

WY yields 5.1%.

For me, there are few things more patriotic than earning fat dividend checks from U.S. companies. I like dividends more than apple pie.

For some fun today, I want to highlight a few attractive, dividend paying stocks with at least a plausible tie to an All-American theme.

I hope you have some fun plans for the 4^th of July. It is one of my favorite holidays. I think it comes from my time in the U.S. Air Force and because it comes right in the middle of summer. This year, with the holiday falling on a Thursday, I am sure if your holding down a job, there will be temptation to turn this into a four-day holiday weekend. That’s my plan!

Let’s get to my Independence Day themed list of stocks going.

What could be more American than the Ford F-150 pickup truck. As Ford Motor Company (F) is proud to remind us in their ads, the F-150 has been the top selling vehicle for 42 consecutive years.

I find it an interesting fact, considering how much the investing public is focused on electric cars. Unfortunately for electric car manufacturers, two-thirds of vehicle sales are trucks and SUVs, with the percentage of cars declining each year.

According to CNBC, Ford is forecast to be selling 90% trucks and SUVs by 2022. Ford shares are a solid dividend investment.

The current yield is 5.9% and the dividend has been increased for seven straight years.

One thing Americans like to do when they drive their F-150’s is to go shopping. While the financial media may be convinced that e-commerce is taking over America, the U.S. Census Bureau reported than in the 2019 first quarter e-commerce sales accounted for 10.2% of total sales. My math calculation from that says that almost 90% of retail still occurs in brick-and-mortar stores and shopping centers.

Tanger Factory Outlet Centers (SKT) is the only shopping center REIT that is a pure play outlet mall investment. The Tanger share price has been hit hard over the last three years on the e-commerce will take over the world theme. I think the numbers show that belief is not backed by data.

Tanger has increased its dividend for 26 consecutive years.

The current low share price means SKT yields 8.75%. This is a great turnaround story.

Another theme tied to the 4^th of July, or at least to summer, is air conditioning. I am sure you know how your power bill goes up as you keep your home cool this time of year.

NextEra Energy (NEE) is the world’s largest utility company one of the best dividend growth utility stocks. NextEra primarily provides power in Florida, operating as Florida Power & Light Company.

The NEE dividend has been increased for 24 straight yields. Dividend growth has been at a 9.5% compound growth rate for the last decade and increased at 13% compounded for the last three years. Current yield is 2.4%.

The dividend growth rate is the force to power the stock higher.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

I receive a lot of questions concerning the different investments on closed-end funds (CEFs); particularly the category of high yield investment types. A lot of investors see the yields and monthly dividends and decide to jump into CEFs without understanding what they are buying.

You can find several danger signals that will tell when to stay away from particular funds. Today I will discuss one such signal.

A closed-end fund is an actively managed investment portfolio whose shares trade on one of the stock exchanges. The closed part comes about because after an initial IPO a fund’s sponsor does not issue new shares.

The amount of capital in a CEF only changes by the investment results and dividends paid.

These funds cover the gamut of investment types. Tax-free municipal bonds funds are a popular category.

The CEF Connect website shows 83 municipal bond focused CEFs. Taxable income funds cover a wide range of fixed income investment types including convertible bonds, high-yield bonds, preferred stock funds and senior loan funds.

The website shows 144 funds in taxable income category. U.S. Equity has 13 sub-categories including sectors such as MLPs, commodities, real estate and health/biotech. This category includes 134 funds.

Lastly, there are the non-U.S. funds, with global funds and area specific funds. You will find 70 CEFs in this group.

Related: Dump These 3 Popular Income Funds Before They Blow Up Your Portfolio

With this broad mix of investment types and very loose rules governing the category, there are a lot of ways a poorly managed CEF can lead to investor losses.

In this article I cover one danger signal related to the basic nature of a closed-fund. Since a fund’s sponsor won’t redeem shares, and the shares only trade on the stock exchange, it is common for CEF’s to trade at premiums or discounts to their net asset values or NAV.

The NAV is the real value of a share if the fund was liquidated and the proceeds paid out to share owners. If you buy a CEF trading at a discount, you are paying less than the share is currently worth.

Paying a premium means you are paying more than the current real value.

Here are five closed-end funds trading at big premiums to NAV. There is no reason to buy one of these and if you own one, a collapsing premium would cost you money even if the fund is performing satisfactorily.

PIMCO California Municipal Income Fund (PCQ) seeks to provide current income exempt from federal and California income tax.

Since October 2018 the premium on PCQ shares has expanded from under 11% to the current 34.3%. A return to the previous premium would offset five years of the current 4.9% tax free yield.

I guess California based investors really don’t want to pay taxes!

Oxford Lane Capital Corp. (OXLC) is a senior loans fund that seeks to achieve its investment objective of maximizing risk-adjusted total return by investing in debt and equity tranches of CLO vehicles.

Investors are attracted to this fund due to the 15% distribution yield.

OXLC is a CEF that could be the poster child for closed end fund dangers, and the 34.8% premium to NAV is just one of the problems with this CEF.

Stone Harbor Emerging Markets Income Fund (EDF) primary investment objective is to maximize total return, which consists of income on its investments and capital appreciation.

The Fund will normally invest at least 80% of its net assets Emerging Markets Securities.

In regular speak, this is an emerging markets debt securities fund. It owns bonds issued by countries such as Argentina, Indonesia, Russia and Ghana.

The fund launched in 2010 and has produced an average 2.8% annual return on NAV. Not a good reason to justify the 15% distribution yield or 35.4% premium to NAV.

PIMCO Strategic Income Fund (RCS) seeks high current income with capital appreciation through investments in global sovereign debt securities.

Despite the “global” in its stated investment goals, the fund has over half its assets in Fannie Mae mortgage backed securities.

While most CEFs limit themselves to 25% to 30% leverage, this fund is 67% leveraged, doubling the equity with borrowed money.

I see a time bomb when interest rates start to rise. RCS currently trades at a 35.5% premium to NAV.

Gabelli Utility Trust (GUT) invests primarily in foreign and domestic companies involved in providing products, services, or equipment for the generation or distribution of electricity, gas, water, and telecommunications services.

The primary claim to fame is the fund is run by celebrity investment manager Mario J. Gabelli, CFA.

Neither his management, the 6.78% 5-year average annual return nor the 8.6% yield justify this fund’s 37.8% premium to NAV.