Answering one of the toughest questions a client can ask: How can I turn my savings into income? paid NuveenInv
Rising stock markets make growth investors happy—but they do little for clients who have other goals in mind. Today, many investors are clamoring for higher income and new ideas. Those approaching retirement, in particular, often need a source of steady income as they transition from wealth accumulation to distribution. Closed-end funds are an option worth considering.
Most CEFs are designed with the goal of providing a reliable stream of income—a result of actively managing a fund’s portfolio as well as its distributions. CEFs seek to deliver smooth, regular and often tax-efficient distributions. Those that utilize leverage—roughly 70% of all CEFs—do so to further enhance the fund’s income and return potential.A key benefit of the CEF structure is its relatively stable asset base.
Closed-end fund historical distribution sources include net investment income, realized gains, and return of capital. Leverage increases return volatility and magnifies a fund’s potential return whether that return is positive or negative. There is no guarantee a fund’s leveraging strategy will be successful. All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time.
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