Despite the recent rise in interest rates, income remains hard to come by.
Many traditional income products – like CDs, corporate bonds and even several dividend stocks – aren’t exactly paying tons in yield these days. And with that, investors have continued to look outside the box when it comes to finding high yields and much-needed income.
This could explain why many investors have once again flocked to closed-end funds (CEFs).
These mutual fund/exchange-traded fund (ETF) cousins have a long history when it comes to providing plenty of income-generation potential. Considering the search for income is still on, investors may want to consider CEFs for their portfolios.
Rising Interest in CEFs
At first glance, closed-end funds are a bit strange. On the one hand, they trade throughout the day just like ETFs. However, they are also actively managed like many mutual funds. But that’s about where the similarities end. The main difference comes down to their prices and the relationship to their net-asset values.