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Jerome Powell Is Secretly Helping Us Earn Yields Up To 13%

Bonds have been bloodied since the Federal Reserve cut rates.

We could dip into bond exchange-traded funds (ETFs)—they’ll have the same tailwind at their back. But I prefer CEFs over bland ETFs for three very simple reasons:

  1. They yield more.
  2. They can use debt leverage to juice returns.
  3. We can buy some CEFs at a discount to their net asset value (NAV).

Note the emphasis on “some.” Once it was clear a bull run in bonds was a certainty, some CEFs’ discounts vanished and haven’t returned. But fortunately for us, other CEFs are still trading for less than they’re worth—while delivering an average of 10% in monthly income, no less.

Legit bargains, or cheap for a reason? Let’s explore.

This post originally appeared at Contrarian Outlook.