UTG: Quality Fund, 6.54% Yield

Seeking AlphaClosed End FundsUTG: Quality Fund, 6.54% YieldNov. 23, 2020 5:36 AM ET|| About: Reaves Utility Income Fund (UTG), Includes: NEE, VZ, WECby: Nick AckermanNick Ackerman CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummaryUTG remains one of the more popular CEFs on the market; this is thanks to its long history of a stable distribution.
The fund currently pays investors monthly a 6.54% annual yield.
UTG is showing a slight premium, but has dipped over the recent weeks.
Written by Nick Ackerman, co-produced by Stanford Chemist
Reaves Utility Income Fund (UTG) is one of the more popular closed-end funds on the market. They have a history of a stable and growing monthly distribution. This makes it a great addition to one's income portfolio. A drawback currently is that the fund does trade at a slight premium. Those who want to be more patient might be gifted with a better entry price. That being said, it isn't necessarily outlandishly expensive based on its more recent historical trading range.
The fund was launched in February of 2004. The objective of the fund is "to provide a high level of after-tax total return consisting primarily of tax-advantaged dividend income and capital appreciation." The additional factor of focusing on tax-advantaged means that it can be appropriate for a taxable account if you are unable to fund a retirement account.
The strategy of the fund is to "invest at least 80% of its total assets in dividend-paying common and preferred stocks and debt instruments of companies within the utility industry." While they leave the door open for greater diversification across asset types; they primarily and consistently focus on equities. This can be positive as generally over the longer term, equities do provide greater returns for the risks taken.
The fund is sizeable at $1.961 billion in assets. The fund does utilize leverage and that currently comes to around 22.7%. This does... Read more