Here’s this month’s scenario, which focuses on using closed-end funds and was discussed with Michael R. Kelly, CFP, EA of Baltimore:
Clients (married couple) are in their mid-40s with $100,000 available to invest, seeking diversification and long-term growth, and are willing to accept moderate volatility.
What research tools do you use to identify prospective funds for clients?
I rely primarily on Morningstar Principia and Hertzfield’s Guide to Closed-End Funds, a monthly newsletter.
What specific fund categories would you recommend for the scenario-clients’ consideration?
Cash: 5 percent; Fixed income: 27 percent; Equity: 58 percent; Eclectic: 10 percent.
What specific funds and allocations would you recommend within those categories?
Cash: Taxable money market fund
Fixed income:
Fund |
% of Portfolio |
BlackRock Credit Allocation Income Trust (BTZ) |
5 |
Bancroft Fund (BCV) |
5 |
AllianceBernstein Income Fund (ACG) |
6 |
First Trust Strategic High Income Fund (FHI) |
6 |
Nuveen Tax-Advantaged Floating Rate Fund (JFP) |
5 |
Equity:
Fund |
% of Portfolio |
Boulder Growth & Income Fund (BIF) |
7 |
Morgan Stanley Frontier Emerging Markets Fund(FFD) |
6 |
NFJ Dividend, Interest & Premium Strategy Fund (NFJ) |
6 |
DCW Total Return Fund (DCW) |
5 |
Central Securities Corp. (CET) |
6 |
Royce Value Trust (RVT) |
5 |
Alpine Total Dynamic Dividend Fund (AOD) |
7 |
Tortoise Capital Resources Corp. (TTO) |
6 |
RMR Asia Pacific Real Estate Fund (RAP) |
6 |
Aberdeen Australia Equity Fund (IAF) |
4 |
Eclectic:
Fund |
% of Portfolio |
The Gabelli Global Deal Fund (GDL) |
5 |
Guggenheim Enhanced Equity Income Fund (GPM) |
5 |