Dividends4Life: 9% Yield, 9% Deep Discount, Monthly Payer

9% Yield, 9% Deep Discount, Monthly Payer

Posted by D4L | Wednesday, August 05, 2020 | | 0 comments »

Trying to find a different slice of the high-yield market for your portfolio? Convertible high-yield bonds and preferreds can offer investors an attractive yield and an additional play on the underlying equity, but the devil is in the details - with high market volatility, the conversion factor can turn sour, and the bond price may not always reflect that change.

If the general idea of convertibles sounds appealing, you may want to consider Calamos Convertible And High Income Fund (CHY). It's a closed-end fund with 514 holdings, whose investment objective is to provide total return, through a combination of capital appreciation and current income. CHY yields 8.99%, and pays monthly. Its -9.42 discount to NAV is cheaper than its one-, three-, and five-year discounts to NAV, which ranged from less than -1% to just -3%. Its top sector holdings are Tech, Consumer Discretionary, and Healthcare - the three best performing sectors in 2020.

Source: Seeking Alpha

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