This actively-managed strategy uses 5-10 ETFs and/or closed-end funds (CEFs) in an attempt to:

  • Reach an income yield target between 3% and 7% (net of fees), while seeking to limit the amount of risk required to attain the net yield.
  • Maintain diversified exposure to income-producing assets.
  • Provide dependable yields in all market conditions.

The strategy invests in ETFs specializing in domestic and international equities, such as master limited partnerships, real estate, convertibles, senior bank loans, high-yield bonds, international debt, and active hedging. The strategy will invest in a combination of non-traditional equity and fixed income securities.

The strategy also uses leverage (increasing investable assets by borrowing) through CEFs.

Learn How Income Is Produced through CEFs

A CEF is a publicly traded investment, like an open-ended mutual fund or ETF. Like an ETF, CEFs trade intra-day on an exchange. Unlike an ETF or mutual fund, a CEF has a fixed number of shares. In addition, share prices for a CEF may substantially deviate from the fund’s net asset value (NAV). When demand for shares exceeds the supply, the share prices may trade at a premium (above NAV). When supply exceeds demand, share prices may trade at a discount (below NAV). Certain CEFs also utilize leverage and/or options, which are typically not found in other fund structures.

The strategy invests in ETFs and CEFs that specialize in income-producing assets. In addition to traditional dividend-oriented equities and investment grade bonds, the strategy generates income using non-traditional asset classes, such as master limited partnerships, real estate, convertibles, senior bank loans, high-yield bonds, international debt, and active hedging. The use of CEFs provides opportunity to buy assets at prices below their true value, as CEFs often trade at large discounts to their Net Asset Values. In addition, some CEFs provide access to leverage (increasing investable assets by borrowing).