The Street.com welcomes seven more closed-end funds into its ratings universe of over 600.
In general, the newly rated funds have posted one-month and year-to-date returns that are quite impressive, given the fall in the overall market. The TSC ratings on these funds are not stellar -- however, given the market turmoil, this is understandable.
The Advent/Claymore Global Convertible Securities & Income Fund
has performed particularly well earning 8% for the month of May and 6% for the year to date and yields a very respectable 11%, which in the current market is a very attractive yield.
There are obviously risks associated given the recent fall in the
and continued credit and inflationary concerns and this is somewhat addressed by AGC trading at a 7.2% discount to its NAV. For a value investor, greater-than-10% discounts can be used as a rough guide as to an entry point or at least a screen for further research before investing. AGC's objective is to invest in convertible securities and nonconvertible income producing securities.
AGC is joined by three other funds with an income focus that also have generated similar results to AGC save the one-month returns where AGC is clearly the leader. The
Pioneer Diversified High Income Trust
is the highest rated fund on the list with a C rating and compares favorably as an investment option along with AGC. HNW invests in high-yield debt securities, loans and preferred stocks in the U.S., primarily in the corporate sector.
The high yield focus should only be embraced by investors willing and able to bear the risks involved -- credit quality is more important than chasing yield for conservative investors during times like the present.
For those investors looking for income and yield but wanting international exposure the
BlackRock International Growth and Income Trust
predominantly invests in income generating equity securities in the U.K., Japan, Germany, Switzerland and France.
The other income fund is the
Dow 30 Enhanced Premium & Income Fund
. However this fund does trade at a small premium of 3.32%.
If we are indeed on the precipice of a severe market decline and further economic woes caution is advised in relation to these and all fund investments so that you don't "catch a falling knife."
Fund Name/Ticker/TSC Grade
1 Month Returns
Advent/Claymore Gbl Con Sec & Inc/AGC/E
Pioneer Diversified High Income Tr/HNW/C
BlackRock Intl Grth and Inc Tr/BGY/D+
Dow 30 Enhanced Premium & Income Fd/DPO/D+
Seligman LaSalle Intl Real Est Fd/SLS/E-
First Trust/Gallatin Spl Fin & Finl/FGB/E-
RMR Asia Real Estate Fund/RAF/E-
Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
While Patel cannot provide investment advice or recommendations, he appreciates your feedback;
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