Author Archive: Michael Foster

The market has served us up a tidy opportunity on a closed-end fund (CEF) yielding an eye-popping 13.1%.

What’s more, this fund is oversold, at a 12.1% discount to net asset value (NAV).

Before I name this CEF, let me explain why this opportunity is in front of us. And since the fund in question holds corporate bonds, we need to start with interest rates.

It’s not news that since the end of the pandemic, the Federal Reserve has focused on fighting inflation. Whether or not it’s brought enough firepower to that fight is something we can debate, but the end result is that borrowing costs have been going up.… Read more

Let’s break down this cloud of pessimism hanging over the economy. As far as I can tell, it’s mainly coming from two sources:

1. The bond market.
2. The labor market.

Concerns around both are overblown, and that’s been a plus for us at my CEF Insider service. It’s pushed out the discounts to net asset value (NAV) on these funds, setting up some nice buying opportunities over the last few months.

It’s increased the dividend yields on some of these funds, too. In some cases near double digits.

General American Investors (GAM), one of the more popular equity CEFs, tells the tale here.… Read more

Ten-year Treasuries yield 5.3%. We’re still not buying.

Because the truth is, that 5.3% yield is an illusion, for two reasons.

First, inflation is at 3.4%. Knock that off your 5.3% yield and you’re left with a real return of just 1.9%.

And second, if the government continues to print money to meet its obligations (likely!), it could fuel more inflation, and higher bond yields. That increases the likelihood that anyone buying a Treasury today will sell at a loss if they do so before maturity.

So where does an income investor turn?

Two words: US stocks.

Trouble is, the S&P 500 yields a mere 1%.… Read more

Joblessness rose last month. And stocks jumped on the news.

It’s weird. And it’s giving us a rare chance to pick up a well-funded 6.8% dividend for 12.3% off its “regular” price.

This deal exists because the fund behind that healthy payout—a tech-focused closed-end fund (CEF) called the BlackRock Technology and Private Equity Term Trust (BTX)—is smack in the middle of a very profitable setup.

That is, both its price on the stock market (in purple below) and the value of its underlying portfolio (its net asset value, or NAV, in orange) are soaring this year:

BTX Skyrockets in 2026 …

The fact that both the portfolio and market price can move independently of each other is a unique feature of CEFs.… Read more

Our favorite 9.5% dividends are on sale, and very few investors realize it.

It’s a striking situation because a payout that size handily beats a 10-year Treasury. Sure, the 10-year pays about 5% now. And it’ll pay you that for a decade, until you get your principal back.

But that’s still only a bit more than half of what these 9.5% payers—called closed-end funds (CEFs)—pay on average. Plus, unlike a Treasury, we can buy these funds’ portfolios for less than they’re actually worth, putting the potential for big upside on the table, too.

In fact, because so many investors are currently dazzled by those Treasury yields, we have a unique chance to buy our favorite CEFs at an unusually deep 7.8% average discount (more on that in a moment).… Read more

Let’s go ahead and break down a recent “win” at my CEF Insider service: an unloved fund that handed us a 48% total return in 10 months!

Why? Because this call went our way for plenty of reasons—and we can take those reasons and “convert” them to strategies that can give us the kind of portfolio we all want: one that delivers healthy dividend income and strong price upside. 

The fund in question: the Columbia Seligman Premium Technology Growth Fund (STK), which returned that 48% from our buy call in the November 2025 CEF Insider to our sell in the recently released September issue.… Read more

Today I want to talk about something we don’t touch on very often in these columns: an obscure (yet highly profitable) situation called a “tender offer.”

I know the name sounds a bit stiff. But if one comes along when you hold a closed-end fund (CEF)—particularly a CEF you bought when it was particularly oversold—wow.

You can find yourself sitting on a fast gain as well as a high dividend payout (as I write this, the average CEF yields around 9%).

As we’ll see in the case of one CEF below, a tender offer can take a fund purchased at an 11.5% discount and let the shareholder cash in a chunk of their holding at nearly full value.… Read more

This latest shift toward interest rate hikes has sent income investors into a tizzy. That’s great for us, because they’re tossing out one terrific fund kicking out a 7.8% dividend that’s grown.

This smartly run corporate-bond fund is now on the table for 11.9% below the value of its portfolio. That not only positions this fund (a closed-end fund, or CEF, to be exact) for future upside—it helps cushion its portfolio, letting us collect its 7.8% payout in peace as the Fed raises rates.

I know that may sound strange: Usually higher rates are bad for bonds, especially for funds chock full of bonds that pay out “old” rates that may be lower than the “new” interest rates likely to come.… Read more

One thing we love to find as income investors? A situation where a double-digit dividend is coming our way—at an undeserved double-digit discount.

Every now and then, a situation like that can get truly extreme. These are the times when we really want to take a closer look.

This is the kind of setup we have with a closed-end fund (CEF) called FS Credit Opportunities Corp. (FSCO) right now.

I’ll cut right to the vitals. As I write this, FSCO yields 13.7%.

The discount? It sits at 27%.

In other words, this fund is now on the table for just 73 cents on the dollar.… Read more

Covered-call funds give us something we demand at a time like this: outsized 8%+ payouts!

And the last few months have shown us something else: These funds work—especially when you use them in a specific kind of market (hint: conditions just like those we’re facing now).

Covered-Call Funds “Translate” Option Gains Into 8%+ Dividends

Even though the name sounds complicated, covered-call funds have a relatively straightforward setup behind them. They start by letting you hold a bundle of stocks, just like, say, an ETF would. In the case of the covered-call fund we’ll talk about today, the Nuveen S&P 500 Dynamic Overwrite Fund (SPXX), these are the companies in the S&P 500.… Read more