In essence, the article presents a case for investing in specific high-yield CEFs as a strategy to generate significant and stable income (10%+) even during market uncertainty, drawing lessons from the 2022 experience and analyzing the current market dynamics related to tariffs and interest rates. The author emphasizes the potential for these discounted funds to provide both income and capital appreciation upon market recovery.Good Information
It’s very important that anyone carries out their own research as the Snowball owns no CEF’S and has no intention of doing so in the near future.
In summary, your purchase of 1798 shares in MRCH for £9,000 provides a buying yield of 5.8%. While you won’t receive the immediate upcoming final dividend due to the ex-dividend date, you are now positioned to receive future dividends from this holding, which has a strong track record of consistent growth.\Good Information Regards
Tks for taking the time to comment but MRCH goes xd today for 7.3p payable of the 29/05/25.
The plan is to re-invest all dividends from MRCH into the higher yielding shares in the Snowball, along with any ‘profits’ when they are available.
5 Safe Bonds Funds for Parking Cash, Yields Up to 5%
Brett Owens, Chief Investment Strategist Updated: April 16, 2025
Are we havingfun yet, my fellow income investor?
We’re now in a bear market, whether the financial media or our intrepid politicians admit it or not. Peak to trough the S&P 500 dropped 21% intraday. Based on closing prices the decline was “only” 18%, however—not quite the technical 20% drop that defines a bear market.
Regardless, let’s not split hairs and call this what it is—the third bear market of the 2020s. Three bears. And it’s only 2025!
You may be wondering, as I was, if this is normal. It is not, my friend. Since 1900 we have averaged 1.77 bear markets per decade. So yeah, three in six years sure is yet another stomach punch:
Last time around, in 2022, we sold early and often and hunkered down in cash. Stocks and bonds were pummeled for nine straight months. There was no point in trying heroics—Benjamins under the mattress outperformed active portfolios. So, we went with the “doomsday” allocation and put many of our payouts on pause for a few months.
It was the most difficult bear market a dividend investor will ever face. Normally we turn to bonds when stocks are uncertain. But that did not work in 2022, because bond prices were dropping faster than their payouts.
Our mission, when we retire on dividends, is to leave our principal intact. But in 2022 both stocks and bonds jeopardized our underlying nest egg, so cash was the only choice.
Fortunately, bear markets tend to last less than a year. Stocks take the stairs up but the elevator down and, on cue, the 2022 bear market ended after nine months. And we went back to a regular dividend-paying portfolio. We made up for our time in cash with price gains, which often follow bear market lows.
Return of capital trumps return on capital when the bear—and Trump tariffs (ha!)—growl.
We have a better landscape to work with here in 2025 because we can buy bonds. Not only do they pay more today than they did three years ago, but these higher interest rates provide us with price “cushions.” If yields come down, we’ll enjoy price gains.
Of course, yields don’t have to come down. The total China tariff rate is currently 145%. This will put upward pressure on imported goods—with the potential for sustained higher prices—over the next six months.
And just last week, as I was putting my kids to bed, I noticed the bond market melting down in the Asia session. The 10-year Treasury rate jumped 12 basis points, over 4.5%. Japan was rumored to be the seller, dumping its sizeable holdings to protest tariffs. The bond meltdown got President Trump’s attention—he announced the 90-day pause on most tariffs the following day.
I don’t blame you for not wanting to stay up at night babysitting bonds through Asia trading windows. China—ye of 145% levies—owns $760 billion in long-term Treasuries. Think they may be looking to sell?
China dumping bonds would obviously put pressure on long rates. This, in fact, may be the reason why long-dated yields are not lower in the face of slowing economic data.
The “short end” of the yield curve, on the other hand, is insulated from overseas sales. It follows the Fed, which is still relatively high, at least for the time being. When the Fed begins to cut again, these divvies will compress, so this may be the best time to find safety and yields between 4.3% and 5%.
These low-duration bonds are not at risk when a trade war adversary begins to sell. Here are five of the safest, most liquid short-term bond funds on the market today:
SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) invests in ultra-short-term US Treasury bills. It is plenty liquid and will protect our capital. BIL yields 4.3%.
The downside with BIL is that its yield may not last. When the Fed cuts rates, BIL’s yield will decrease, too. But this “dividend cut” will not eat into the price, so your principal will remain intact. (The same caveat and logic follow for our four other funds.)
PIMCO Enhanced Short Maturity Active ETF (MINT) pays 4.8%. This fund is actively managed by “blue blood” fixed-income leader PIMCO. Dan “The Beast” Ivascyn and his team buy high-quality, short-duration assets. Thanks to their expertise, MINT benefits with a bit of extra yield beyond what short-term US Treasuries pay.
JPMorgan Ultra-Short Income ETF (JPST) yields 4.6% and owns short-term investment grade bonds, both fixed and floating rate.
iShares Floating Rate Bond ETF (FLOT) pays the most at 5.0%, but it is down 1% month-to-date. FLOT buys investment-grade floating-rate bonds, and its “floaters” are a bit shaky as rates drop. Sock FLOT away on the watch list. We’ll revisit it on the other side of the upcoming economic downturn, when stagflation becomes a theme.
Finally PGIM Ultra Short Bond ETF (PULS) pays 4.7%. PGIM is another top name in Bondland. PULS buys ultra-short duration bonds with higher yields than BIL.
Of course it is difficult to retire on dividends using funds that only pay 4% or 5%. This requires $2 to $3 million in capital—we don’t all have piles of cash like this lying around.
Fortunately there are safe, simple monthly dividend payers dishing up to 10% right now. Ten percent on a million dollars is $100,000 per year in dividend income. We bank this without touching principal. Now we’re talking.
These funds are secure and built to handle recessions. The steady every-30-day payments help smooth out the stock market’s daily—ahem—gyrations these days.
Let’s introduce the ETF first. The idea is simple. Invest in a passive tracker of the 100 international ideas that yield the highest dividend. The highest dividends are found in Financials firms, Energy and Mining with Real Estate and Industrials comprising nearly 90% of the index.
Conclusion
I’ve sampled through a number of the holdings, and also focused on the UK names, and as you can see some good names in there where Serica has its temporary Triton disruption, where Energean had its Italy assets deal with Carlyle fall through, M&G is perhaps the weakest given its outflows which hopefully cease before it (and the UK) bleed out with outflows. These six give a decent flavour of what you are buying into.
I’m struck by the fact that there are ideas which I’d otherwise not be able to easily access. Companies like shipping co Zim, or Norwegian Oily DNO.
I’m struck by a -0.84% capital loss in a pretty volatile quarter is not bad either.
I get to a 12.64% average yield and a 8.7X p/e as the average of the 100 holdings.
A ~1% yield per month is quite appealing as a place to hide, and where the index rebalances jettisoning those too weak to sufficiently pay dividends replacing them with the highest dividend out of the top #200 not in the index.
Is it wise to buy into this as the world faces potential recession? Some ideas are cyclical but not all. Besides I’m not wholly convinced yet that the forecast doom and gloom will happen. I see countries accelerating trade deals on the back of Lib Day (not with the US), although maybe the UK and Japan may get a US free trade deal. US tax cuts and strong momentum could surprise us with the US. I see myself watching this until August, and then re-evaluating (prior to the August rebalance)
I pounced on this given its 15% fall from the Lib Day sell off I’ve got a fair bit of margin of safety and where the capital returns are broadly zero and where I get over 12% yield to park some money.
For non-UK folks there’s a US SDIV, a Euro UDIV (that ticker would be considered very rude in the UK!) listed in Germany, Italy and Switzerland.
There is a 0.45% management charge plus trading costs (quarterly) which I expect aren’t awfully high, but I couldn’t find what they were (the TER).
Regards
The Oak Bloke
Disclaimers:
This is not advice – make your own investment decisions.
How We’re Protecting (and Growing) Our Dividends in the Tariff Panic
Michael Foster, Investment Strategist
In the run-up to the reversal of many of President Trump’s tariffs, we saw some true panic selling that turned into what can only be called panic buying: Investors eager to get back in as they realized the selloff was a buying opportunity.
And to no one’s surprise, tariff-related market drama has continued since then.
Last Wednesday’s bounce happened so fast I couldn’t get my response to the selloff published in time. Earlier last week I wrote, “Fortunately, this situation will not last forever. Stocks will ultimately recover their losses from this last week.” Then stocks did recover before those words could get published!
But the key thing to keep in mind is that, over time, stocks do move higher (though they don’t often post a single-day bounce as high as the one we saw last Wednesday!). So buying oversold stocks (and especially deep-discounted high-yield closed-end funds, or CEFs, like those in the portfolio of our CEF Insider service) and sticking with them through market turmoil is a smart move every single time.
After all, losses in the S&P 500 do disappear over time. They’ve done it after every single crash we’ve experienced before.
And there’s an important, but less obvious, fact about this that investors aren’t considering as much as they should: how this situation has affected two of the so-called “safe havens” that have been getting a lot of attention lately: gold and Treasury bonds.
First, let’s look at how index funds tracking the S&P 500 (in purple below), gold (in orange), long-term Treasuries (in blue) and short-term Treasuries (in green) were doing before last Wednesday’s bounce.
Everything Was Crashing
I don’t need to tell you what’s happening in this chart: Trump’s very high tariffs were expected to cause two things: higher prices on goods (since those tariffs will be paid by importers, who will raise prices on the products consumers buy) and slower consumer spending (again, because of those higher prices).
As a result, most Wall Street firms raised their expectations of a recession in 2025. (For the record, I raised my expectations of a recession a month ago, so I’m glad to see the media and analysts finally come around.)
The chart above ends at the close of trading on April 8. Now, when we fast forward the tape to the close of trading on April 9, we see that all of these assets recovered, for the most part, with the S&P 500 seeing the most dramatic recovery of them all.
Stocks, Treasuries and Gold All Bounce
Note that gold surged too, and has continued to do so since. This, again, tells us that there is still some worry in the market about inflation, but the bigger question is: Is gold a good hedge? Should one have gold in one’s portfolio over the long term to protect against downturns like this?
To answer that question, let’s zoom out.
Gold’s Long-Term Showing
We see that, in the last decade, gold outperformed short-term Treasuries by a huge margin and did much better than long-term Treasuries, even considering their interest payments (these are total-return values, including all dividends and other income). Long-term government bonds actually lost money.
And these returns are all before we account for inflation. So much for Treasuries as a safe haven!
The underperformance of short-term Treasuries makes sense. After all, these bonds are liquid and, as you can see from that straight green line, low volatility. That leads us to a couple of takeaways around safe havens.
First up: Long-term US bonds are not a good hedge.
But did gold give us anything in exchange for underperforming stocks? If Treasuries aren’t a good way to diversify away from the aches of the market, is gold?
Well, gold collapsed alongside stocks between the time Trump announced his tariffs and his announcement reversing most of them. So in this case, the answer is no.
But over the long term, gold is also clearly not a great hedge, since it underperforms stocks. In other words, if you have it in your portfolio to hedge your stocks, it just means it’ll drag down your returns. Let’s drill into this point a bit.
Stocks Crush Gold
If we go back 33 years (the earliest data I can easily chart for you), gold had a 6.9% annualized return, as of this writing, while stocks had returned 9.9% annualized. Compound interest means that this difference adds up: For every $10,000 you invested in stocks, you ended up with over $133,000 more in pure profits from stocks than from gold over this time period.
So, our second takeaway around “safe havens” writes itself at this point: Investing in gold will drag down your returns over the long term. And today is a particularly dangerous time to hold gold.
Gold’s Unusual Run-Up
Over the last three years, gold has massively outperformed stocks, with a 17.2% annualized return versus 7% for stocks. This makes sense, considering that the run-up over the last three years began when inflation spiked. Inflation worries have crowded the headlines ever since.
However, remember that gold’s long-term annualized return is 6.9%, meaning it’s outperforming the past by over double. Stocks, however, are underperforming their long-term average.
This means that, not only will investing in gold drag down returns in the long term, but gold is currently overpriced relative to its long-term trendline, and it is likely to revert to the mean. Stocks, on the other hand, are underpriced relative to their long-term trendline, and are likely to revert to the mean, as well.
The Market’s in Turmoil—but These 9.5% “AI-Powered” Dividends Are Made for It
Tariffs are on. Tariffs are off. Stocks are volatile. And as we saw above, so-called “safe haven” trades are no help.
So what I’m about to say might sound strange: Your best move now is to … buy high-yielding closed-end funds focused on artificial intelligence.
These funds are viciously oversold now, and their dividend yields have soared as a result: In fact, the four AI funds I’m urging investors to buy amid the tariff turmoil are quietly spinning off yields up to 12%. Taken together, they kick out an incredible 9.5% average dividend yield.
Better than sitting in cash. Better than chasing shaky bonds.
Passive income is essentially money that comes in regularly with little active effort once the initial setup is complete. Think of it as an income stream that flows even when you’re not clocking in hours at a traditional job. From dividend-paying stocks and investment trusts to real estate rentals or monetized digital content, the idea is to build an infrastructure—be it financial capital or creative assets—that generates income almost on autopilot.
The term “Passive Income Live” can refer to platforms or resources—like the website Passive Income Live—that offer up-to-date insights on navigating today’s economic challenges while building such income streams. For example, articles featured on that site discuss strategies like leveraging investment trust dividends, diversifying asset allocation, and mitigating the risks that come with market concentration, particularly in highly weighted indices. This kind of analysis is especially useful now, as market fluctuations (from tariff impacts to broader economic shocks) remind investors that even “passive” strategies must be managed intelligently.
For someone in the UK, there’s a growing interest in tailoring passive income strategies to local conditions. Resources such as the article on “6 Best Passive Income Ideas To Make £1,000/Month In The UK” from The Motley Fool outline approaches ranging from dividend stocks to real estate investments and beyond. What stands out is the emphasis on diversification—not putting all your eggs in one basket—to build a resilient financial portfolio that continues working for you over the long haul.
If you’re exploring passive income for yourself, it’s worth reflecting on your own situation: What assets (time, money, skills) can you invest upfront? How comfortable are you with risk? And importantly, how diversified do you want your income streams to be? Building a few different channels can safeguard you against market shifts and boost overall financial security.
