Retirement Income: Equity Funds Averaging 8.75% Yield

Retirement Income: Equity Funds Averaging 8.75% Yield
For many retirees, income generation is a higher priority than portfolio growth. That is not to dismiss the importance of capital preservation, but the emphasis on capital growth that should characterize investing decisions during one's earning years will often decline in retirement. For those whose foremost priority is high income, closed-end funds should be a major pillar of their portfolios. By and large these funds are designed specifically for producing income. There are closed-end funds to fit most requirements, especially with regard to tax treatment of the income. These range from tax-free municipal bond funds to the least tax-efficient fixed-income funds that pay ordinary income. There are funds for every asset class. For my next few articles I want to turn attention to equity funds.
Among the equity funds there exists a host of specialty asset classes. Funds exist that target utilities, infrastructure, energy (MLPs especially), financials, healthcare and real estate. There are purely domestic and global funds; there are funds that target a single country or region. There are leveraged and unleveraged funds.
In general (there are, of course, exceptions) leveraged funds take advantage of lower-cost debt to generate high income. The unleveraged funds tend toward options-based strategies. My own investment priorities tend toward the option-income, unleveraged side of the spectrum, but I decided to have a look... Read more