What is Closed End Funds?
Closed-end funds (CEFs) are different from mutual funds in some significant ways. For example, CEFs trade on market exchanges during the day, just like exchange-traded funds (ETFs). However, mutual funds and ETFs issue and redeem shares at their net asset value (NAV), so the number of shares fluctuates due to demand.On the other hand, CEFs have a fixed number of shares. The price of a CEF is determined by supply and demand in the secondary market. The fund’s shares can trade at a persistent premium or discount to the underlying NAV (Net Asset Value).
Best High Dividend Funds
When we invest, we face with investing problem. Typically we have to sacrifice current yield. One of the choices to boost income is by investing in closed end funds. These funds may provide high dividend yield for income. Some of the funds may provide yield as high as 7-9%.
These top 10 high yield closed end funds for 2016 are selected based on its performance, yield, and discount. These funds include several different classes such as bond funds, and stock funds. From this best funds list, you may find each individual fund review. You can find the fund performance, expense ratio, and yield or dividend from the table below.
Top 10 high yield closed end funds for 2016 are:
- DoubleLine Income Solutions Fund (DSL)
- Nuveen Premium Income Municipal Fund 4 Inc (NPT)
- PIMCO Dynamic Income Fund (PDI)
- BlackRock Corporate High Yield Fund Inc (HYT)
- Eaton Vance Tax-Advantaged Global Dividend Income Fund (ETG)
- John Hancock Tax-Advantaged Dividend Income Fund (HTD)
- Eaton Vance Tax-Advantaged Dividend Income Fund (EVT)
- JH Premium Dividend Fund Common (PDT)
- Cohen & Steers REIT & Preferred Income Fund Inc (RNP)
- Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX)
DoubleLine Income Solutions Fund
DoubleLine Income Solutions Fund invests in bonds and other income producing securities around the world. It currently invests about 45% of assets in developing countries. The current yield is 9.85%. The total net assets are $3.1 billion. This fund is managed by Jeffrey Gundlach, Bonnie Baha, and Luz Padilla. Gundlach is known as one of the best bond managers.This DoubleLine fund has returned -8.23% over the past1 year. In 2015, it has year to date return of -3.16%. Top 3 bond sectors are foreign corporate bonds (45%), corporate bonds (17%), and general debt (10%).
Nuveen Premium Income Municipal Fund 4
Nuveen Premium Income Municipal Fund 4 utilizes its assets to purchase municipal bonds. It provides tax free yield for income. The current yield is 6.38%. It has an expense fee of 1.52%. The fund manager is Christopher L. Drahn. It has $878 million of assets.Morningstar has ranked this best closed end fund with 4 stars rating. It has returned 3.28% over the past 3 year, and 4.98% over the past 5 year. In 2015, the YTD return is 0.29%.
As of August 2015, the top 4 bond sectors are healthcare, limited tax obligation, transportation, and US guaranteed debts. The fund has an average maturity of 20.18 years.
PIMCO Dynamic Income Fund
PIMCO Dynamic Income Fund is currently trading below its NAV. The market price is trading 8.22% discount to its NAV. This PIMCO fund has a high yield of 8.97%. The fund managers are Joshua Anderson, Daniel J Ivascyn, and Alfred T. Murata. Its expense fee is only 0.70%.This best PIMCO fund has an annualized return of 14.10% for the past 3 years. The past 3 years performance is as follows:
- Year 2015: -0.78% (YTD)
- Year 2014: 20.20%
- Year 2013: 11.97%
BlackRock Corporate High Yield Fund
This BlackRock fund invests mainly in below investment grade fixed income securities. With assets of $2.2 billion, it has a high yield of 1.32%. The fund sponsor is BlackRock Advisors. Its expense fee is .132% per year.Morningstar has ranked this high yield bond fund with 4 star and bronze rating. In 2015, it has year-to-date return of -7.52%. It has returned 0.36% over the past 3 year, and 6.67% over the past 5 year.
Eaton Vance Tax-Advantaged Global Dividend Income Fund
This Eaton Vance fund invests in dividend paying common and preferred stock. The fund managers are Michael A. Allison and John H. Croft. Its total expense fee is 1.42%. It has $1.7 billion of assets. The average UNII per share is $0.1058. The current distribution rate is 7.82%.In 2015, it has year to date return of 9.20%. This equity fund has returned 12.85% over the past 3 year, 13.03% over the past 5 year, and 6.30% over the past decade.
More: Top Tax Advantaged Equity CEFs 2014
As of September 2015, the top 5 stocks in its portfolio are Google Inc, AXA SA, Apple Inc, Deutsche Telekom AG, and Prudential Corporation Plc. Top 3 countries are USA, UK, and France.
John Hancock Tax-Advantaged Dividend Income Fund
John Hancock Tax-Advantaged Dividend Income Fund has a high dividend yield, 7.38%. This fund invests mainly in dividend paying common and preferred stocks. Its expense fee is 1.55%. The current share price is $19.75.The past 5 years performance is as follows:
- Year 2015: -4.41% (YTD)
- Year 2014: 30.82%
- Year 2013: 8.33%
- Year 2012: 11.00%
- Year 2011: 24.88%
Eaton Vance Tax-Advantaged Dividend Income Fund
This Eaton Vance Tax-Advantaged Dividend Income Fund is ranked with 3 stars rating by Morningstar. This tax advantaged fund invests in high paying dividend stocks. The current yield is 9.02%. This equity fund has a 3 year average return of 12.62%.Top 4 stocks in its portfolio are General Electric Co, Exxon Mobil Corporation, JPMorgan Chase & Co, and Wells Fargo & Co. Top 4 country allocations are USA, Switzerland, UK, and Ireland.
John Hancock Premium Dividend Fund
John Hancock Premium Dividend Fund also has a high dividend yield of 8.38%. The annual portfolio turnover rate is 67%. It invests in dividend paying preferred stocks and common equity securities. This high yield fund sponsor is John Hancock Advisers LLC.Cohen & Steers REIT & Preferred Income Fund
This Cohen & Steers REIT & Preferred Income Fund has a high yield as well, 8.58%. It uses its assets to purchase common stocks, preferred securities and debt securities. The current share price is $17.28. Its expense fee is 1.71%. It has $1.3 billion of assets.The past 5 years performance is as follows:
- Year 2015: -1.75% (YTD)
- Year 2014: 29.94%
- Year 2013: -0.75%
- Year 2012: 28.94%
Nuveen Nasdaq 100 Dynamic Overwrite Fund
This Nuveen Nasdaq 100 Dynamic Overwrite Fund sells call options covering between 35% and 75% of the value of the funds equity portfolio, with a long-run. With assets of $712 million, its expense fee is only 1%. The current share price is $18.05.Top 4 sectors are Internet Software & Service, Tech Hardware & Storage, Biotechnology, and Software. In 2015, the year to date return is -2.72% (up to August 29, 2015).
Where can you buy these funds?
You can buy these high yield closed end funds from your brokerages. These funds are traded like exchange traded funds or stocks. You may need to pay commission for buy or sell these funds. Some of the brokerages are:- Scottrade
- TD Ameritrade
- Fidelity
- E*Trade
- Interactive Brokers (IB)
Fund Performance
| Name | Symbol | Dividend Yield | 1 YR Return | 3 YR Return |
|---|---|---|---|---|
| Cohen & Steers REIT & Preferred Income Fund Inc. | RNP | 8.102 | 1.65% | 23.27% |
| Nuveen Nasdaq 100 Dynamic Overwrite Fund | QQQX | 7.756 | -- | -- |
| John Hancock Tax-Advantaged Dividend Income Fund | HTD | 7.352 | 0.90% | 30.33% |
| JH Premium Dividend Fund Common | PDT | 7.673 | 3.52% | 14.64% |
| Eaton Vance Tax-Advantaged Global Dividend Income Fund | ETG | 7.76 | -3.27% | 42.14% |
| Eaton Vance Tax-Advantaged Dividend Income Fund | EVT | 7.452 | 0.37% | 41.32% |
| DoubleLine Income Solutions Fund | DSL | 9.841 | -7.68% | -- |
| Nuveen Premium Income Municipal Fund 4 Inc. | NPT | 6.424 | 6.28% | 10.31% |
| Pimco Dynamic Income Fund | PDI | 8.486 | -0.57% | 49.87% |
| BlackRock Corporate High Yield Fund Inc | HYT | 8.661 | -9.77% | -0.49% |
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