09-23-2015, 03:56 PM
(09-23-2015, 03:31 PM)Rasec Wrote: What is the general opinion around CEFs?
Specially as we enter a bear market and appreciation is sort of a mirage, is the idea of an attractive 8-12% paid in dividends something that interests you guys or not really?
Every time I buy shares of JNJ, XOM or PG I keep thinking to myself that buying a CEF paying 9% would probably mean a better return in the medium/long term (who knows...).
An exhaustive list of CEFs out there:
http://www.dividend.com/dividend-stocks/...nd-equity/
Out of curiosity, right now I'm in ~ 50%/50% in terms of CEFS vs individual stocks, my CEF (EVT) is paying 9.40% while my basket of stocks is yielding 4.3%.
I believe you are comparing apples with oranges. CEF's have no consistent growth of income.
For example, according to FAST Graphs, EVT has a 9YR dividend growth rate of -0.2% and an annualized total return of 4.1% compared with 6.1% from the S&P. EVT did pay out 3X the income that the S&P did, but an investor lagged in total returns to the tune of over $3,000 on a $10,000 initial investment.
CEF's may have their time and place, but in my limited knowledge of them, I'd say they are more for people relying on investments for income than for investors looking for long term growth in their portfolio.