These are my current fixed income selections in my portfolio which is ~40% deployed. As I missed the epic January sales this year, I bought in based on market conditions as what was a palatable price in late Spring to Summer. Actual safety has lot to do with entry price per Benjamin Graham's Intelligent Investor. It's the initial outlay that makes an investment "safe" and so I've been mindful of "margin of safety". As discussed in my root post about building a passive income portfolio, I am expecting continuing volatiliy and bond market getting beat up in the sector rotation.
- 👍- This is not a recommendation per say as much as I was able to enter a position for a well-regarded fund. I am looking to add more if they ever go on sale. I'm happy with them because they pay out like a champ and have risen significantly since purchase. I'm unhappy because they are too expensive currently to add any more and are at risk for price declines.
- 😞- These funds are dipping and rising ~5% continually but since they payout, I keep them
- 🔥- higher risk. A lot of these CEFs are leveraged which more conservative investors would consider risky. I use this icon to denote higher risk.
- 📕- uses leverage, most of the CEFs use leverage to juice yield.
- Munis -
- taxable leveraged CEF 📕
- BBN 👍5.5-6% - Composed mostly of BABs(Build America Bonds) which are not tax-exempt, I hold this my retirement account.
- tax free federal - I hold a big basket of munis from Black Rock/Nuveen/Eaton Vance. I buy them when they go on sale, sell them if they get expensive.
- leveraged CEF : EVN, BBK, MYF, MFT
- mutual fund: VWAHX
- tax free California CEFs📕:
- NAC, MCA (PCQ was my favorite for many many years but it's at a crazy premium of 35% right now and dangerous to hold.)
- MUC, BFZ ~3% - extremely safe mostly A/AA grade bonds. Bought for appreciation rather than yield.
- REITS etc...
- general
- ETF:VNQ👍4% - decent default Vanguard REIT etf for the uninitiated and that's what I started with in 2014
- CEF 📕: RQI 👍👍 8%- gold standard REIT CEF from Cohen & Steers
- preferreds
- CEF 📕: RNP👍👍7%- REIT CEF with preferred exposure from Cohen & Steers
- CMO-E ~7.5%- more than year past call date 5/13/2018 but Colorado Wealth Management on Seeking Alpha had recommended as a reasonable buy and hold and it was one of the few REIT preferreds not too overpriced at the time and the worst cash-to-call was only -0.02 per share. I'm just collecting 7.4%
- blend
- CEF 📕: JRI - not in the league of Cohen & Steers but this slightly junkier blend of stock/bond/preferreds from real world assets from Nuveen does alright
- mREITs🔥 - have been touted as countercyclical to the business cycle so I entered as a potential hedge and trying to have a small portion of high yield in my portfolio. Remains to be seen if this will end in tears as mREITs are all about timing.
- NLY 11% 🔥- This was a very uncomfortable position for me to open. It's the best of breed largest mREIT that was recommended by a number of SA income authors. There was significant insider buying.
- ANH 🔥- Very small snack position. Also not comfortable for me but Colorado Wealth Management@Seeking Alpha recommended ANH as BV was only 70%.
- RMBS
- BKT 📕 - all agency backed MBS rated AAA, this CEF has ~70% coverage right now which isn't great so we will see when a rate cut is announced
- Infrastructure, Utilities CEFs 📕
- (Why no ETF? - normally I would hold either VPU/XLU but they are yielding only 3% and overbought.)
- UTF👍👍👍 - 7% My favorite infra fund from my favorite REIT company Cohen & Steers. I really wanted the best CEF ute which is Reave's UTG which unfortunately was highly overpriced.
- MFD 😞🔥- 9% global infrastructure, my weakest investment due to european holdings. I bought it on sale after Macquarie announced a dividend cut.
- FIF 😞🔥- 10% energy infrastructure, electricity generation, natgas. High volatility made up by 8+% payout.
- Preferred - so little quality is available at par after the series of rate cuts so I try to buy in the two day window IPO at OTC where it's available below par or cheaper.
- JPM-J JP Morgan Chase 4.75% Callable 2024
- TRTN-C 👍🔥 7.25% Triton is the largest shipping container lessor, cash flow is good enough for me to take a risk on a non-investment grade preferred.
- CEFs 📕
- JPS 👍- Nuveen CEF heavy on bank preferreds
- ETFs
- PFXF - preferreds minus financials. PFF obviously is the gorilla in the preferred ETF space but PFF is too heavily weighted towards financials which I have in my portfolio
- High Yield Fixed Income📕 🔥🔥🔥
- PCI 🔥 ~8% -Pimco high income CEFs are a category unto itself. Out of the 10 funds, only PCI was trading with a minor 2% premium when I bought. There are some serious PCI fans amongst the Seeking Alpha community. I have a manageable position and collecting 8% is very nice. However there is a $1 billion new offering announced which dilution may erode NAV.
- GNT🔥10% - Commodities/gold CEF with covered call strategy. I have small position in for sector exposure. I keep thinking I'll close it but I'm bribed by big monthly payouts.
Obviously if we were turning back the clock, I would have bought TLT.
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