It’s becoming increasingly difficult to generate a decent yield in the current environment. One asset class that’s been getting some play lately is preferreds, the stock/bond hybrid that combines some additional upside beyond traditional fixed income. That’s why the Cohen & Steers Limited Duration Preferred & Income Fund (LDP) holds some appeal.
The coronavirus pandemic has altered the direction of the global economy and that could make value stocks an interesting proposition once more. For exposure to a potential comeback in this segment, I like the Royce Value Trust (RVT). It could be well-positioned to outperform in either a broader recovery or a rising interest rate environment.
If you’re looking to target the high yields available in the CEF universe, but prefer to have an active management team overseeing the portfolio, the Invesco CEF Income Portfolio ETF (PCEF) is an ideal option. Its fund-of-funds approach offers diversification, a mix of investment strategies, rotates in and out of the most advantageous opportunities and a yield that typically hovers around the 8% level.