In this interview with Jane King, John Cole Scott, President and CIO of CEF Advisors, explains how a well-managed portfolio should contain a mix of high-yielding closed-end funds (CEFs) and business development companies (BDCs) to help generate income for clients. Scott says those funds have been yielding between 7% and 14%, outperforming stocks and bonds. That can be helpful for retirees looking to avoid return risk, Scott says.
Scott also speaks to the tax-planning benefits of CEFs and BDCs, many of which often enjoy “pass-through” tax treatment. And municipal bond fund CEFs are federally tax-free, he adds. Scott also explains how these funds can offer diversification benefits and operate as a potential hedge against inflation. With an eye to monitoring market conditions, Scott says his firm actively manages portfolios containing CEFs and BDCs and makes changes as appropriate.
Learn more about John Cole Scott, CEF Advisors and Hybrid Income Portfolio
