Despite Some Extra Volatility, There’s Enough Here To Warrant Consideration For This 10% Yielder
Well Will You Look At That...
Every week, we’ll profile a high yield investment fund that typically offers an annualized distribution of 6-10% or more. With the S&P 500 yielding less than 2%, many investors find it difficult to achieve the portfolio income necessary to meet their needs and goals. This report is designed to help address those concerns.
Even though the VIX has come back down to earth, a huge sense of volatility remains. In April, the S&P 500 fell by nearly 6% over the course of three weeks. Then it was up 14% from April to July. From there, it fell nearly 9% in three weeks during the yen carry trade unwind before retesting new all-time highs just two weeks after that. These may not be huge single day swings that cause the VIX to spike, but they’re huge swings in terms of longer-term market sentiment and confusion over whether stocks should be up or down. This kind of environment may be a signal that investors should consider backing off on risk.
The Gabelli Equity Trust (GAB) is one of the largest CEFs out there and is focused on more value-oriented companies, which could be a nice counterweight to S&P 500 or tech-tilted portfolios. This fund, in particular, has a pretty solid long-term track record, but it’s fallen victim in recent years to the tech rally that’s dominated the equity markets. The Gabelli name is well-known in the investing world and this fund could provide some balance and yield in an increasingly unstable market.
Fund Background
GAB is a closed-end, non-diversified management investment company whose investment objective is long term growth of capital, with income as a secondary objective. Investments will be made based on management's perception of their potential for capital appreciation. The Fund seeks out undervalued companies with greater than average potential for growth. The fund also uses leverage to enhance yield and total return potential.
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