Maximize Your Returns: 3 Undervalued Closed-End Funds with Yields Up to 9.1%

Closed-end funds offer average yields of 9.1% and total returns of 10%+ yearly. The discount to net asset value (NAV) is an indicator of when returns may start to build. Three overlooked CEFs include Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO), which trades at an 8.7% discount and offers a 7.9% dividend.

Closed-end funds (CEFs) are a compelling investment option for those seeking high yields and total returns. As of now, CEFs offer average yields of 9.1% and total returns of 10%+ yearly, making them an attractive choice for investors [1]. The discount to net asset value (NAV) serves as an indicator of when returns may start to build, providing a valuable tool for investors to identify potential opportunities.

One overlooked CEF is the Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO), which trades at an 8.7% discount and offers a 7.9% dividend. ETO's portfolio includes a mix of American mega-caps like NVIDIA (NVDA) and foreign powerhouses like AstraZeneca (AZN), making it an attractive option for investors interested in global stocks. Despite its generous dividend, ETO's market price-based total return has lagged, inflating its discount from where it was a half-decade ago. This discrepancy presents an opportunity for investors to capitalize on the fund's strong performance and high yield [1].

Another overlooked CEF is the Eaton Vance Tax-Managed Buy-Write Income Fund (ETB), which holds S&P 500 mainstays like Apple (AAPL), Microsoft (MSFT), NVIDIA (NVDA), Amazon.com (AMZN), and Berkshire Hathaway (BRK.A). ETB offers a 9.1% yield and has delivered a 11.3% annualized return on NAV over the last half-decade. However, investors have taken little notice, causing its market price-based return to lag and its discount to widen to 7.8%. This discrepancy presents an opportunity for investors to capitalize on the fund's strong performance and high yield [1].

The John Hancock Financial Opportunities Fund (BTO) is another overlooked CEF that focuses on the financial sector, mainly banking firms. BTO offers a 7.5% yield and has delivered a 18.4% annualized return on NAV over the last five years. Despite its strong performance, investors have been hesitant to bid up the fund, causing its market price-based return to lag slightly. BTO's current 5.5% premium is actually a deal given the fund's long-term trend, which includes a premium that has hit double digits several times in the last decade [1].

These overlooked CEFs offer high yields and discounts, making them attractive investment opportunities for investors seeking to capitalize on the potential for high returns. However, it is essential to conduct thorough research and consider one's investment goals and risk tolerance before investing in any CEF.

References:

[1] https://www.nasdaq.com/articles/these-huge-yields-91-have-secret-discount-set-vanish