Lazard Global Total Return and Income Fund: A Safer Global CEF Option with High Income Potential

The Lazard Global Total Return and Income Fund Inc (LGI) is a closed-end fund that offers a high level of current income while retaining some equity market exposure. The fund invests in a diversified portfolio of bonds and equities globally, with a focus on generating returns through interest and dividend income. Its diversified portfolio and stable income stream make LGI a safer investment option compared to equity indices.

The Lazard Global Total Return and Income Fund Inc (LGI), a closed-end fund (CEF), offers investors a high level of current income while retaining exposure to the equity market. With a 10.23% yield at the current share price, LGI significantly outperforms major domestic and global equity indices, such as the S&P 500 (1.12%) and the MSCI World Index (1.36%) [1].

LGI's high yield is particularly attractive in an environment where the U.S. stock market is richly valued, with the S&P 500 Index having a price-to-earnings ratio of 29.58, well above its historical mean of 16.16 [1]. This high valuation has led to lower dividend yields, making it challenging for investors seeking income to support their lifestyles. LGI's substantial yield of 10.23% provides a significant income stream, with a $1 million investment generating approximately $102,300 in annual income, compared to the $11,200 from an S&P 500 index fund [1].

Over the past ten years, LGI has outperformed the MSCI All-Countries World Index, which includes foreign stocks, with a total return of 212.84% compared to the index's 186.52% [1]. This performance is notable given LGI's lower allocation to the United States, which has accounted for 64.43% of the MSCI All-Countries World Index [1]. The fund's underweighting of the U.S. market, at 55.0% North America (likely including the U.S. and Canada), has allowed it to benefit from global diversification [1].

LGI's diversified portfolio of bonds and equities globally contributes to its stable income stream and safer investment profile compared to equity indices. Despite the fund's strong performance, investors should remain cautious and evaluate the fund's current positioning and finances to make an informed decision about future prospects.

References:
[1] https://seekingalpha.com/article/4812338-lgi-a-solid-global-cef-that-could-be-safer-than-the-equity-indices-upgrade