Income Opportunities in CEFs and Emerging Markets
Closed-end funds and emerging-market debt offer opportunities for income investors. We also look at Vanguard’s most recent announcement about its bond ETF and what to expect from the FOMC this month.
Closed-end funds (CEFs) are typically actively managed and offer income-producing advantages and diversified income. “Closed-end funds are one of the most efficient investments for building, growing and sustaining the ongoing income investor’s need in retirement.” Because of stable asset bases, CEFs are also advantageous in specialized and alternative asset classes “such as less liquid or smaller capitalization securities and markets, real estate and private placements.”
“Demand for income remains strong thanks to an increasing number of retirees, record low interest rates, lengthening life expectancies and the dwindling use of annuities.” Emerging-market debt continues to offer income investors opportunities, however, “the sustainability of its recent rally must be carefully considered.”