UPDATE ON SPECIAL CLOSED END FUND PORTFOLIO, 42% CAPITAL GAINS IN 2016 WHILE EARNING 12% YIELD WITH LOW RISK $BGB $BGX $FEI $FMO $FSD $HIO $HYI $JGH $JQC $KYE $MIE $NTG $VTA

This post was published on ZYX Global Multi Asset Allocation Alert. The call on NTG was provided on The Arora Report Market Blog that is free to the public and it was clearly stated that the remaining 12 positions were being provided only to paying subscribers.  All 13 positions are very profitable.  For the foregoing reason, only NTG and not the remaining 12 positions will be included in the performance statistics.

This year, the special closed end MLP and High Yield portfolio has worked out well. All 13 closed end funds dipped into the buy zones and now show about 42% capital gains while on the average earning about 12% annualized dividend.

Closed end funds often trade at premium or discount to net asset value.  Other than this difference, for practical purposes, they provide all the benefits of ETFs and trade like ETFs.

The plan was to pick them up at deep discounts.  The plan succeeded.  The portfolio was bought in 2016 at an average discount to net asset value of about 24%.

Up to 10% of the total portfolio is in these closed end funds.  This special portfolio is being maintained separate from the Model Portfolios.

Here is an update

NAME  SYM  BUY
PRICE
PRICE NOW %
TRANCHE 
%
YIELD
 ENERGY MLP  NTG  $12.64  20.09  25  13.29
 ENERGY MLP  KYE  $5.40  11.21  25  18.52
 ENERGY MLP  FMO  $9.17  14.88  25  18.76
 ENERGY MLP  FEI  $9.71  16.27  25  13.59
 ENERGY MLP  MIE  $6.86 10.83  25  13.41
 HIGH YIELD BOND  FSD  $12.43 15.73  25  7.72
 HIGH YIELD BOND  JGH  $11.40  15.65  25  13.68
 HIGH YIELD BOND  HIO  $4.01  5.10  25  8.98
 HIGH YIELD BOND  HYI  $12.14  15.23  25  10.87
SENIOR LOAN PARTICIPATION  BGX  $12.30  15.17  25  8.78
SENIOR LOAN PARTICIPATION  VTA  $9.31  11.59  25  9.02
SENIOR LOAN PARTICIPATION  JQC  $6.92  8.48  25  8.67
SENIOR LOAN PARTICIPATION  BGB  $11.85  14.88  25  10.63

Notes:

  1. Price Now is as of this writing.
  2. % yield is calculated based on the buy price.

What To Do Now

Those holding the Special Closed End Fund Portfolio may consider continuing to hold the portfolio in entirety.

Those not in the closed end portfolio may wait for signals to buy closed end funds at deep discounts at appropriate times.

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