Top 10 Closed

Readers have shown interest in seeing what my top ten positions are. As I've noted previously, I only hesitated because I wasn't exactly sure where to start. I use several different portfolios/accounts to separate my various positions. In today's article, I'm going to be looking at my top ten closed-end fund positions.

There have been several changes to my top positions. That being said, I'm a relatively longer-term type investor, if I had to describe myself. So I don't believe the changes have been all that drastic. Finishing off Q1 2020 - my portfolio was up 8.94% overall - with the S&P 500 up 6.17%. Though I don't necessarily benchmark my portfolio against the S&P 500 - I'm using it for context. The S&P 500 is too narrow a benchmark for most investors as it only invests in large-cap U.S. names. Most investor's portfolios are composed of some fixed-income, preferred securities or international positions as well.

What hadn't been working so far in 2021 were investment grade and municipal bonds. They are showing slight declines at the end of Q1. This was primarily due to the interest rate jitters the market was going through. With the 10-year Treasury yield rising. That appears to have since subsided and we aren't seeing daily headlines anymore. However, the effects are already in for these interest-rate-sensitive investments.

(Source)

As I previously did in that earlier article looking at my top ten, I'm going to utilize Portfolio Visualizer. Most readers are familiar with the website and I believe it provides a fairly easy-to-understand breakdown of one's portfolio.

To give a clear picture, I'm going to input the data for my top ten holdings as if it is representative of my whole portfolio and so it will come to a 100% allocation. I will also be using a $10,000 default amount. This also helps with clarity and is a standard figure to use. However, I will also include my total allocations too - for greater context.

Here was my top ten on December 16th, 2020. The day the article was first published to members of the CEF/ETF Income Laboratory.

(Source - Portfolio Visualizer)

Now fast forward to 4/26/2021, and this is the breakdown today.

(Source - Portfolio Visualizer)

That is the allocations if the top ten were representative of my whole portfolio. Now I can share what the allocations are against my total CEF portfolio.

(Source - Author)

The top ten positions in my portfolio comprise over 41% of my portfolio. I own 46 positions total in this portfolio. So the top positions do make up a significant amount of my portfolio overall.

One thing I would note is that if I had just held these top ten positions - I would have been better off. The returns are showing a return of 9.46% compared to my overall portfolio return of 8.94%.

(Source - Portfolio Visualizer)

The reason this portfolio only shows 2020 and 2021 returns is because BlackRock Science and Technology Trust II (BSTZ) limits the data. That fund only launched in July 2019 and therefore, couldn't give a full-year performance in 2019.

In my previous article, I had removed that fund and bump up my 11th position. That was Kayne Anderson NextGen Energy & Infrastructure Fund (KMF) and that fund has moved to the 12th position.

As previously mentioned, I'd consider myself a longer-term investor so I don't have too many significant changes. However, the main change would be when I sold Cohen & Steers Infrastructure Fund (UTF). I moved that capital over the John Hancock Tax-Advantaged Dividend Income (HTD) and Reaves Utility Income Fund (UTG). They had previously been positions in my portfolio but were smaller.

Overall, the change didn't change the overall allocations in my portfolio considerably. This is because UTF holds utilities and some exposure to preferred. HTD and UTG also have utility exposure, with HTD also including a healthy mix in preferred.

What it did do was move those positions up to my largest positions once I made that move. I did that move in January of this year. The reason for selling UTF was simply because the valuation had become too high. Not to say that HTD and UTG are screaming buys, but the valuations certainly made a lot of sense at the time.

In fact, I did so exactly on January 12th, 2021 of this year. Here has been the performance between the three funds so far since that date.

So far, it seems to have been mostly a wash on a NAV basis - though on a price basis I believe it was a great move. UTG has been an underperformer, but HTD has performed materially better as well - helping to offset the underperformance from UTG. On a share price basis, HTD has rocked both funds easily and I believe that is primarily due to its valuation at the time being significantly better. It is still better now, but also expensive relative to its own historical range.

The other fund to have fallen off the top list along with UTF is Eaton Vance Tax-Managed Buy-Write Strategy (EXD). However, that wasn't a conscious decision, but due to normal market movements. That fund now comes in at my 11th largest position.

A fund that has done well and moved up the list quite significantly has been John Hancock Financial Opportunities (BTO). One of my more favorite funds heading into this year as I suspected financials to do well. I've been lucky so far and the rest of the year could prove me wrong.

Besides HTD, UTG and BTO here has been the performance between each fund since the original top ten article on December 16th, 2020.

Here we can see that Cohen & Steers Quality Income Realty (RQI) and BlackRock Enhanced Equity Dividend (BDJ) have performed well since that time too. This includes some great total returns from Cohen & Steers REIT & Preferred & Income (RNP) as well - another REIT-focused fund - though with material exposure to preferred as well. None of these outperforming BTO, and the incredible strength it has shown during that time period.

Bringing up the year in terms of total returns is PIMCO Dynamic Credit and Mortgage Income (PCI) and BlackRock Science and Technology Trust (BST). PCI continues to struggle with the current economy and being related to fixed income, means some pressure from the rising rates we saw. BST has been impacted by its tech-oriented portfolio; the type of fund that blew away total returns in 2020, but has since taken a bit of a backseat in 2021.

What we also see is how overall that share price returns have been outpacing NAV returns. This has resulted in the tight discounts we are seeing across the board. We can also see how much discounts have tightened up just since the end of 2020 as well.

(Source - RiverNorth)

I hope today's preview into my portfolio's top positions has helped provide some ideas that other investors can use for their own investments. These might not be the best funds, but this wasn't a review of the best funds YTD - this was a review of the funds I actually hold. I believe all of these today still make an attractive portfolio. I don't plan on selling any of these and I like how the positions are looking for the rest of 2021. They have been and will continue to accomplish my own goals and objectives for investing.

One area that I do want to focus on going forward is adding more international securities. I have added funds such as BlackRock Enhanced Global Dividend Trust (BOE) in September of last year, and I also added to Eaton Vance Tax-Managed Global Buy-Write Fund (ETW) in January of this year. However, it still represents only a small allocation in my portfolio. This is primarily due to these positions still owning a considerable allocation to U.S. investments.

At the CEF/ETF Income Laboratory, we manage ~8%-yielding closed-end fund (CEF) and exchange-traded fund (ETF) portfolios to make income investing easy for you. Check out what our members have to say about our service.

Not only are our portfolios high-yielding at around 8%, but have offered high-income growth as well year-over-year. You don't have to settle for dividend cuts just because you own high-yielding investments.

To see all that our exclusive membership has to offer, sign up for a free trial!

This article was written by

---------------------------------------------------------------------------------------------------------------

I provide my work regularly to CEF/ETF Income Laboratory with articles that have an exclusivity period, this is noted in such articles. CEF/ETF Income Laboratory is a Marketplace Service provided by Stanford Chemist, right here on Seeking Alpha.

Analyst's Disclosure: I am/we are long HTD, UTG, RNP, BDJ, BTO, BSTZ, RQI, PCI, BST, EOS, EXD, KMF, BOE, ETW. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This article was originally posted to members of the CEF/ETF Income Laboratory on April 26th, 2021.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.