This 11% Dividend Aces Our 3-Step “Buy Test”
Michael Foster, Investment StrategistUpdated: January 26, 2026
There are plenty of reasons to buy closed-end funds (CEFs), but the one that most investors love most is pretty obvious.
The income!
The average CEF yields 8.6% as I write this. And while most investors have been conditioned to believe that this level of payout is unsustainable, this is not the case with CEFs. Many of these funds sport yields of 8% or more and haven’t cut payouts in years, even decades.
In fact, several have grown their dividends in that time.
The reason why is simple: The stock market gains around 10.6% per year on average. So a CEF that invests in stocks and pays 10.6% per year can maintain payouts, theoretically, since the fund is just handing that profit to shareholders as a dividend.… Read more
