{"id":256674,"date":"2025-05-25T17:45:11","date_gmt":"2025-05-25T17:45:11","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/closed-end-funds-cefs-19-may-2025\/"},"modified":"2025-05-25T17:45:11","modified_gmt":"2025-05-25T17:45:11","slug":"closed-end-funds-cefs-19-may-2025","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=256674","title":{"rendered":"Closed End Funds (CEFs): 19 May 2025"},"content":{"rendered":"


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Allium<\/em><\/p>\n<\/div>\n

Have you been following the Hawking Portfolio<\/a><\/strong><\/em><\/span>?\u00a0 If not, you may want to give a close looking to this unique approach to investing.\u00a0 If income is of interest then investing in Closed End Funds (CEFs) is definitely an option.\u00a0 Before launching into this management model I highly recommend investors first read Steven Bavaria\u2019s book, The Income Factory<\/a><\/strong><\/em><\/span>.<\/p>\n

If one is in a higher tax bracket this style portfolio is better suited to tax deferred accounts such a IRAs or Roth IRAs.<\/p>\n

How might one go about selecting CEFs to include in a portfolio?\u00a0 Check the Hawking portfolio for examples.\u00a0 Then check out the CEF Connect<\/a> <\/strong><\/em><\/span>website.\u00a0 For starters check these three factors.<\/p>\n

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  1. Distribution Rate.\u00a0 This is the interest percentage paid on an annual basis.\u00a0 Take care not to chase the highest percentages.<\/li>\n
  2. Discount Premium.\u00a0 What is the value of the underlying securities?\u00a0 Look for CEFs with negative NAV or Discount Premiums.<\/li>\n
  3. Effective Leverage.\u00a0 This is the most subjective of the three criteria.\u00a0 I tend to look for leverage values that are 25% or lower.<\/li>\n<\/ol>\n

    If one is interested in portfolio diversification the CEF portfolio provides another alternative to the basic ones I track here at ITA.\u00a0 To review, here are the options.<\/p>\n