I’ve bought for the Snowball 16014 shares in ENRG VH Global Energy Infrastructure For 10k
XD Thursday for a dividend of 1.45p, a yield of 9%
£232.00 payable 08/01/2026
As at 30 June 2025, the Company’s NAV per share was 100.90p, a decrease of 2.2% during the six-month period under review. The primary driver of the decrease in NAV per share was unfavourable foreign exchange rate movements, with GBP strengthening against USD and AUD.
In line with the dividend target for the year ending 31 December 2025 of 5.80p per share, the Company has paid a quarterly dividend of 1.45p per share with respect to Q1 2025 as well as a dividend of the same amount per share with respect to Q2 2025, giving a total of 2.90p per share for the period, compared to 2.84p per share for the first half of 2024, an increase of 2.1%.
Following the announcement of the Proposed Asset Realisation Strategy, the Board intends to continue paying a quarterly dividend to shareholders. As the Proposed Asset Realisation Strategy progresses, the size of the quarterly dividend will depend on the level of net income generated by the assets that remain in the portfolio (noting that some assets are more cash generative than others).
I’ve sold the Snowball shares in FGEN for a profit of £322.00. They were bought to collect the dividend but the Snowball only owned them for a few days and the profit equalled the dividend it was to good to ignore.
The Dark Side Of High-Yield CEFs And Covered Call ETFs
Nov. 30, 2025
Samuel Smith Investing Group
Summary
High-yield CEFs and covered call ETFs lure in investors with juicy yields.
However, there are several hidden dangers lurking beneath the surface of many of these funds.
There is a better way to generate high-yielding passive income and potential long-term total return outperformance.
PM Images/DigitalVision via Getty Images
A very popular investing strategy is to buy a diversified portfolio of double-digit-yielding closed-end funds (“CEFs”) and exchange-traded funds (“ETFs”). The reason this approach is a well-traveled path is that, especially for retirees, such massive passive income can sufficiently cover their living expenses without having to amass a huge nest egg. Additionally, the appeal is that you do not need any growth from your investments. You simply need the cash to continue flowing in from distributions to still generate a pretty decent equity-like 10%-ish return. However, in my view, this strategy is flawed, and I think it makes a lot more sense to generate income to cover living expenses from a different investing strategy, and in this article, I will detail why as well as what the better approach is.
Why High-Yield Funds Fail To Deliver Long-Term Stability
The simplicity of the approach of just buying a diversified set of double-digit-yielding funds certainly has its appeal and its perks. In particular, it takes out the emotional aspect as well as the potential for human error. If you buy diversified portfolios, you greatly reduce the landmine risk that comes from putting too much capital into one or two highly risky individual stocks, and you can generally better buy and hold such diversified investments due to their somewhat more stable nature than having to ride the highs and lows that come with individual stock picking. However, if you can learn to master your emotions, that removes much of the advantage that comes with this simpler approach, and yet, if you still stick with the diversified high-yielding fund approach, you are still saddled with several downsides.
The Hidden Dangers Of Leverage And Covered Calls
The first big downside is that many of these funds employ significant leverage to enable them to achieve such high yields. That puts them at enormous risk because if the market (SPY) were to crash suddenly, they may get hit with margin calls, which can force them to sell their holdings at the worst possible time, thereby locking in permanent loss of capital and loss of underlying income-generating ability in those funds. This can also lead to painful dividend cuts from the funds, or even if they do not cut the dividend, they begin to erode NAV quite rapidly due to paying out much more in distributions than they generate internally.
Additionally, if you are generating a double-digit yield from a covered call ETF or CEF, even if it is not leveraged, this can still have a similar effect. This is because if the fund crashes suddenly with a broader market and then goes to write its monthly call options to generate lucrative income in the months following that sharp drawdown, it is also setting itself up to potentially lock in permanent losses should the broader market rally sharply. This thereby effectively forces the fund to sell its underlying holdings due to the covered calls expiring in the money at prices that are potentially much lower than they were when you first bought the fund. This can also lead to long-term net erosion, as is evidenced by the Global X Nasdaq 100 Covered Call ETF (QYLD)’s poor NAV per share performance over time despite its underlying index (QQQ) doing very well.
However, even in cases where there are funds like NEOS NASDAQ-100(R) High Income ETF (QQQI), Neos S&P 500(R) High Income ETF (SPYI), Goldman Sachs S&P 500 Premium Income ETF (GPIX), and Goldman Sachs Nasdaq-100 Premium Income ETF (GPIQ) that have managed to implement somewhat actively managed flexible call-writing strategies that do preserve some upside during recoveries, as well as some leveraged funds like the Cohen & Steers Real Estate Income Fund (RQI) and others that have managed to navigate market crashes without having to slash their distribution, you are still also saddled with fairly high expense ratios. This is particularly the case with CEFs, which tend to charge much higher expense ratios than actively managed covered call ETFs do.
Even in the case of QQQI and SPYI, you are still paying a pretty hefty 0.68% expense ratio, which is materially higher than what you would pay for holding the underlying index that they have, and yet those funds also underperform the underlying indexes over time, as evidenced by their performance thus far.
A Better Way: Building Your Own High-Yield Portfolio
Given the flaws of CEFs and ETFs, the approach I implement is to build a diversified portfolio of about 25 individual stocks, give or take 5 to 10 on either side. Additionally, I make sure that the vast majority of them are durable, defensive business models with strong balance sheets, mid to high single-digit yields with an occasional double-digit yield if the market seems to be exceptionally mispricing a security, such as it recently did with Plains All-American Pipeline (PAA) when I bought it at an over 10% next 12-month projected yield.
I then also focus on companies that are growing their dividends year after year on a moving forward basis or that are likely to continue growing their dividends every year moving forward, while also at a pace that meets or beats inflation. Beyond that, I also want to make sure that the dividend is fully covered by cash flows and ideally comfortably covered by cash flows, or at least will be in the near future due to significant projected oncoming growth. Ultimately, I want to make sure that both the dividend payout and the dividend growth are sustainable.
What this produces is a diversified portfolio of individual businesses that are quite easy to create a fairly narrow fair value range on. This means that, especially on a diversified basis, it is unlikely that I am going to suffer significant long-term permanent impairments to the portfolio relative to the broader market (SPY). Meanwhile, I can just sit back and let volatility work for me. As certain sectors and individual securities move in and out of favor, I can trim and even sell the ones that appreciate close to fair value and then add more to the ones that move out of favor and trade at a big discount as long as their underlying business fundamentals remain sound. I then rinse and repeat and can continue this process, all the while collecting attractive income and seeing my underlying dividend per share in those holdings increase, and thereby, in most cases, their intrinsic value also increases while I wait for the market to wake up to the embedded value.
Yes, I make my share of mistakes. However, the vast majority of the time, my mistakes stem from either not paying enough attention to the true state of the balance sheet, as is the case with Algonquin Power & Utilities (AQN), or trying to bet on a cyclical business and mistiming the state of the industry. In the case of LyondellBasell Industries (LYB), I ran into a case where it has had a historically long downturn.
As far as the industries that tend to be the most durable and defensive and that I therefore tend to overweight, these include midstream (AMLP) businesses like Enbridge (ENB) and Enterprise Products Partners (EPD), utilities (XLU), and infrastructure (UTF) businesses like Brookfield Infrastructure Partners (BIP)(BIPC) and Clearway Energy (CWEN)(CWEN.A), real estate (VNQ), especially triple net lease REITs like Realty Income (O) and W.P. Carey (WPC), as well as multifamily REITs like MidAmerica Partners (MAA), and alternative asset managers like Blackstone (BX), Brookfield Asset Management (BAM)(BN), and Blue Owl Capital (OWL).
With a diversified portfolio of these sorts of businesses, the math becomes quite clear: you get a mid- to high-single-digit yield, as well as a single-digit annualized growth rate that puts you at an aggregate 10% to 12% target annualized rate of return. Then you ensure that you buy these businesses on a value basis and sit back, relax, let the dividends flow, let the growth compound, and ultimately wait for the market to reappraise the business closer to fair value. At this point, you can sell it and recycle the capital into new opportunities like this and repeat the process. This strategy then has the potential to turn a 10% to 12% annualized total return into a 15%+ annualized total return target thanks to the valuation multiple expansion component of the investment thesis.
Investor Takeaway
While CEFs and ETFs certainly keep things simple and can lure investors in with juicy yields and high-quality companies in their underlying holdings, they suffer from a few major flaws. CEFs use a lot of leverage and charge steep management fees in most cases, while covered call ETFs cap significant upside and therefore can lead to long-term underperformance relative to their underlying index, in addition to charging higher fees than the underlying index ETFs charge. Additionally, neither of these types of funds makes use of opportunistic capital recycling on a value basis in most cases, and they tend to be very broadly diversified, which limits their ability to take truly high-conviction positions and generate meaningful alpha for investors. Additionally, given that the broader market looks quite overvalued right now, these index-like or, at the very least, closet-indexing funds face an increasingly daunting path to achieving outperformance moving forward.
Given all these weaknesses of investing in high-yielding CEFs and covered call ETFs, I have found that building a portfolio of sufficiently diversified mid- to high-yielding stocks that also grow their dividends at a rate that meets or beats inflation over time and then implementing value-investing principles and opportunistic capital recycling can deliver total return outperformance of not only covered call ETFs, dividend growth ETFs like the Schwab U.S. Dividend Equity ETF (SCHD), and leveraged high-yield CEFs, but also the S&P 500 (VOO), while delivering higher yields and similar to even stronger dividend growth over time.
The Snowball 2026.
Whilst Investment Trusts trade at an above market average and return a higher yield, the Snowball will continue to hold and trade Investment Trusts, whilst building up a knowledge in ETF’s and CEF’s.
Remember with a dividend re-investment plan you fail by the month and not the year. I have crunched the fcast dividends and the expected total income for 2026 is
£9,884 meeting the fcast.
Remember no dividend is 1000% safe and some dividends could be trimmed. If the dividend is drastically changed the share will be sold and re-invested back into another higher yielder.
As a buffer, as dividends are received they will be re-invested back into the portfolio earning more income.
Hopefully some dividends will be gently increased to allow for inflation.
Foresight Environmental FGEN go xd for 1.99p this Thursday.
If you sell on Thursday, you will be paid the dividend, when a share goes xd the price usually falls by the same amount but sometimes by more or it doesn’t fall at all.
If you buy the share before the close of the market on Wednesday, you should collect 5 dividends of 1.99p, in just over 1 year. Lets assume the dividend is increased and the total paid is 10p. Remember no future dividends are guaranteed to be paid.
The current price 67.7p yield 11.52%.
The yield if held as above, 14.75%.
A yield of 15% compounded doubles your income in 5 years. Depending on Mr. Market you could sell the share and make a similar trade. All baby steps.
BlackRock Energy & Resources Inc Trust PLC ex-dividend date British Land Company PLC ex-dividend date Caledonia Investments PLC ex-dividend date Cordiant Digital Infrastructure Ltd ex-dividend date Foresight Environmental Infrastructure Ltd ex-dividend date GCP Asset Backed Income Fund Ltd ex-dividend date Montanaro European Smaller Cos Trust PLC ex-dividend date Riverstone Credit Opportunities Income PLC ex-dividend date US Solar Fund PLC ex-dividend date Utilico Emerging Markets Trust PLC ex-dividend date VH Global Energy Infrastructure PLC ex-dividend date
Disclosure – Non-Independent Marketing Communication
This is a non-independent marketing communication commissioned by Sequoia Economic Infrastructure Income (SEQI). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
Sequoia Economic Infrastructure Income (SEQI) has reported strong results for the half year ending 30/09/2025. The NAV total return when annualised was 10.1%, well in excess of the targeted gross portfolio return of 8-9%.
The NAV per share itself was up 1.2% to 93.67p, and dividends of 3.44p were paid or declared, consistent with the full year target of 6.875p. These dividends are fully cash covered and as of 27/11/2025 the prospective yield on the shares was 8.6%. Meanwhile, there is pull-to-par upside of 3.1p per share within the current portfolio valuation.
Share price total returns were 7.7%; despite dividends delivering a high share price yield, the price itself fell slightly from 78.3p to 77.9p as the discount widened from 15.4% to 16.8%.
The management team have continued to invest in new loans at highly attractive rates, recycling £213m into new investments at a weighted average yield-to-maturity of 8.9%.
One shift has been to reduce the weighting to the US in the light of policy uncertainty on renewables and tariffs. New loans have been made in the EU and the UK instead. Meanwhile, exposure to data centres has come down as the team react to weakening covenants in a crowded trade and look to reallocate to areas more attractive on a risk/reward basis.
Kepler View
Sequoia Economic Infrastructure Income’s (SEQI) portfolio of conservatively managed infrastructure loans looks like an attractive source of yield in the current environment. With economic risks front and centre, we think a portfolio mostly invested in senior secured loans (57%) and in non-cyclical but economically-vital sectors looks likely to prove resilient. Looking forward, the huge demand for infrastructure in a low growth world is not currently being satisfied by the supply of capital, creating a strong technical picture for an investment via a specialist-managed portfolio with the scale to participate in large projects while being highly diversified across assets, industries and themes.
We think the portfolio is benefitting from the relatively short maturity of the loans the team make, with the current weighted average life being just 3.2 years. Lending at shorter maturities has allowed agility in portfolio positioning. As well as the geographical move from the US to Europe, it has facilitated first entry into the data centre market, and more recently a dialling back of exposure as investors crowd in. The team highlight the weakening of covenants as the key to their decision to reduce exposure to data centres during the AI craze, which speaks to the defensiveness of approach which we think should appeal to income investors looking to invest in the private debt markets.
At the end of the year, the trust held £84.9m in cash and had drawn down just £33.2m of its revolving credit facility of £300m. The team thus have plenty of liquidity and it is worth noting that the high yield of 8.6% is being delivered without the structural use of gearing, in contrast to many other high-yield options in the closed-ended fund space. The average yield-to-maturity of 8.9% on new loans during the year is in line with the targeted gross portfolio return of 8-9%, although it is slightly down on the current overall portfolio yield of 9.7% (itself down marginally from 9.9% at 31/03/2025). Falling base rates present a challenge, but with a high proportion of investments fixed rate or hedged and the team reporting spreads remaining at healthy levels, the outlook for the dividend looks stable to us, particularly when considering the uninvested cash and gearing, and the spend on buybacks which could be redirected.
For new investors we think the 16% discount adds to the attractions, boosting the dividend yield and providing scope for a capital return over time on top of the pull-to-par effect in the NAV which is expected to deliver a gain to NAV of 3.1p by 2028.
FSCO (12.8% yield, –11.8% discount) and DLY (9.7% yield, –8.1% discount) stand out as “fallen giants”—offering strong income but trading at steep discounts, reflecting investor caution.
Premium pricing:
PTY (10.7% yield, +11.8% premium) and PDI (14.7% yield, +6.4% premium) show investors are willing to pay above NAV for PIMCO’s reputation and aggressive credit strategies.
Moderate yield, near parity:
FOF (8.1% yield, +1.1% premium) and NZF (7.7% yield, –2.5% discount) hover close to NAV, suggesting balanced sentiment.
Discounted but steady:
BTZ (9.2% yield, –3.6% discount) and EVV (8.7% yield, –3.6% discount) provide solid yields with modest discounts, appealing to value‑oriented investors.
Short duration caution:
SDHY (7.9% yield, –7.1% discount) reflects investor skepticism about short‑duration high‑yield bonds in the current rate environment.
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Premium funds like PTY/PDI are the “heroes on pedestals,” commanding loyalty despite risks.
Discounted funds like FSCO/DLY are “fallen banners,” offering rich income but trading below their worth, embodying resilience under doubt.
Middle‑ground funds (FOF, NZF, BTZ, EVV) are the “steady beams,” neither exalted nor shunned, symbolizing cautious balance.
