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

  • Reach an income yield target between 3% and a maximum target percentage* (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.

*CLS will seek the maximum yield, given current market conditions. Over the long term, CLS seeks a target yield of 6%.

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. These features, in addition to the opportunity to buy a fund trading at a discount to its NAV, make CEFs especially attractive for income-oriented strategies.