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Shopping For High Dividend ETFs? Beware Volatility

This article originally appeared in the October issue of REP. Magazine and online at Wealthmanagement.com Yield-starved investors turn to high-dividend payers to squeeze out some cash flow, but how do you squeeze extra yield out of the market without blowing your risk budget? In today’s low-yield bond market, it’s no wonder income-oriented investors have looked to dividends for supplemental cash flows. In February 2011, ten-year Treasury notes were paying nearly two percentage points more than the S&P 500 dividend yield (see Chart 1). The yield premium has since plummeted and, at times, actually turned into a discount. Blue Chips Stalled The ten-year and blue-chip benchmarks are now pretty much stalled at a two percent yield, forcing many investors to cast about for better-paying opportunities. Especially enticing are high-dividend exchange-traded funds (“ETFs”), which offer cash flows nominally devoid of duration and interest rate risk. Seven have track records stretching back more than five years: The 100 stocks making up the iShares Select Dividend ETF (NYSEARCA: DVY ) are screened on the basis of dividend growth and sustainability. Utilities account for more than a third of the portfolio’s capitalization. Financials, mostly REITs, come in second. The 50-stock SPDR Dividend ETF (NYSEARCA: SDY ), which screens the S&P 1500 Composite Index for stocks with 20 years or more of consecutive dividend increases, maintains a narrower portfolio. Consequently, SDY skews heavily toward REITs. Vanguard avoids REITs entirely in its high-dividend product. The 400+ stocks populating the Vanguard High Dividend Yield ETF (NYSEARCA: VYM ) are more or less evenly weighted by sectors and tilt toward large caps. First Trust sponsors two veteran high-dividend ETFs. The larger, First Trust Value Line Dividend ETF (NYSEARCA: FVD ), is built with low-beta issues found with Value Line’s proprietary “safety rating” methodology. Not surprisingly, FVD gives over nearly a quarter of its real estate to utilities. The loose inclusion criteria of the WisdomTree High Dividend ETF (NYSEARCA: DHS ) accounts for its 900+ stock portfolio and its relatively modest sector bets. Still, financials are weighted more heavily than utilities. FVD’s stablemate, the First Trust Morningstar Dividend Leaders Index ETF (NYSEARCA: FDL ), is a 100-stock portfolio comprised of companies that have boosted their dividends over the past five years. REITs are specifically excluded. Accordingly, FDL tilts toward utilities. Rounding out the set is the PowerShares High Yield Equity Dividend Achievers Portfolio ETF (NYSEARCA: PEY ), a 50-stock portfolio of large caps selected on the basis of their ten-year dividend growth histories. Utilities figure heavily in the mix-more so, in fact, than in the other veteran funds. When interest rates sag, income-hungry investors may be tempted to chuck fixed-income exposure in favor of high-dividend funds. That’s a very risky move, however. Remember: These funds are equity products. Replacing all or part of a portfolio’s fixed-income allocation increases exposure to stock market volatility and can further concentrate risk in certain industry sectors. Choices, choices So how do you squeeze some extra yield out of the market without blowing your risk budget? The first step ought to be identifying the high-dividend funds that provide the greatest diversification. There’s a couple of ways to look at this problem. From Table 1, you can see that the First Trust FDL portfolio, in addition to offering the highest dividend yield, has the lowest r-squared and beta correlations versus the S&P 500. That makes FDL pretty different and pretty attractive. FDL, however, posts the worst Sharpe and Sortino ratios of the lot. Not a good thing. The Sharpe metric, remember, rates a fund’s risk-adjusted returns using total volatility. The Sortino ratio does the same thing but only uses downside deviation as the representation of risk. If preservation of capital is paramount, a high-dividend fund sporting the best Sharpe and Sortino ratios ought to be a top pick. That makes the PowerShares PEY fund a standout. The next problem is the allocation issue. Just how much of the high-dividend fund do you add to your portfolio? And, where do you carve out room for it? Here, a little backtesting offers clues. Suppose you’re keen on dampening risk as much as possible while keeping your commitment to a high-dividend product at 20 percent of your capital. Let’s look back at the last five years to see how PEY might have performed. Classic 60/40 Portfolio Our benchmark will be a classic “60/40” portfolio: 60 percent stocks, represented by the SPDR S&P 500 ETF (NYSEARCA: SPY ), and 40 percent bonds, proxied by the iShares Core Aggregate Bond ETF (NYSEARCA: AGG ). Taking a 20 percent PEY carve-out from the bond side (a “60/20/20” allocation) produces a significantly higher average annual return than the benchmark but yields an inferior Sortino ratio. Splitting the PEY carve-out equally from the equity and bond sides (a “48/32/20” mix) improves both nominal and risk-adjusted returns but ticks up volatility. The sweet spot’s found by carving out a PEY allocation from the classic portfolio’s equity side (a “40/40/20” exposure). There’s a minimal impact on the portfolio’s average annual return but a significant reduction in volatility and, therefore, realized risk. Both risk ratios, especially the Sortino metric, are dramatically improved at the cost of just 10 basis points in annualized returns. High div/low vol packages Some newer high-dividend ETFs attempt to entice risk-averse investors by branding themselves as “low-volatility” portfolios. The oldest of these, launched in 2012, is the PowerShares S&P 500 High Dividend Portfolio ETF (NYSEARCA: SPHD ). SPHD’s index methodology screens the S&P 500 for 50 of the blue-chip benchmark’s highest-paying and least-volatile components, tilting the portfolio heavily toward utilities, consumer staples and financials. At last look, SPHD paid out a 3.5 percent dividend. It’s no surprise that SPHD is highly correlated to its parent index. Movements in the S&P 500 explain 77 percent of SPHD’s variance. SPHD’s beta, at .76, makes the fund a middling competitor to the veteran high-dividend products. Using SPHD in a “40/40/20” portfolio pares 50 basis points off the return earned by a classic “60/40” portfolio and an equal amount from the portfolio’s volatility. The significant improvement in the portfolio’s Sortino ratio bespeaks SPHD’s defensive sector concentration. SPHD isn’t the only ETF claiming low-vol street cred. The Global X SuperDividend US ETF (NYSEARCA: DIV ) is another 50-stock portfolio that screens stocks for low volatility, but its universe includes MLPs and REITs. Thus, the fund’s high-dividend yield is north of seven percent. The fund’s equal-weighting scheme magnifies the energy and financial sectors’ influence, which perhaps explains why a portfolio including DIV has Sharpe and Sortino ratios worse than a classic “60/40” mix. As with anything, it pays to look beyond the advertising for real evidence. Volatility is relative. Investors will soon have another exchange-traded high-div/low-vol option. Legg Mason recently filed a registration statement for an ETF based on the QS Low Volatility High Dividend Index, a proprietary benchmark that culls 3,000 domestic stocks for sustainable dividends as well as low earnings and price volatility. The Legg Mason Low Volatility High Dividend ETF is expected to be listed on Nasdaq, but no ticker symbol has yet been assigned. What’s clear from this exercise is that dividends come at a cost. Each high-dividend fund is constructed differently, and each presents a unique combination of risks and rewards. The highest-yielding product may not be the best addition to your portfolio. It’s often better to accept a more modest cash flow than risk hard-earned capital.

Best And Worst Q4’15: Materials ETFs, Mutual Funds And Key Holdings

Summary The Materials sector ranks seventh in Q4’15. Based on an aggregation of ratings of 12 ETFs and 14 mutual funds. IYM is our top-rated Materials sector ETF and FSCHX is our top-rated Materials sector mutual fund. The Materials sector ranks seventh out of the 10 sectors as detailed in our Q4’15 Sector Ratings for ETFs and Mutual Funds report . Last quarter , the Materials sector ranked sixth. It gets our Neutral rating, which is based on an aggregation of ratings of 12 ETFs and 14 mutual funds in the Materials sector. See a recap of our Q3’15 Sector Ratings here . Figure 1 ranks from best to worst the nine Materials ETFs that meet our liquidity standards and Figure 2 shows the five best and worst-rated Materials mutual funds. Not all Materials sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 139). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Materials sector should buy the Attractive rated mutual fund from Figure 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 (click to enlarge) * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The ProShares Ultra Basic Materials ETF (NYSEARCA: UYM ), the Van Eck Market Vectors Steel Index ETF (NYSEARCA: SLX ), and the Fidelity MSCI Materials Index ETF (NYSEARCA: FMAT ) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 (click to enlarge) * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Rydex Series Basic Materials Fund (MUTF: RYBOX ) (MUTF: RYBAX ) is excluded from Figure 2 because its total net assets (TNA) are below $100 million and do not meet our liquidity minimums. The iShares Dow Jones U.S. Basic Materials Index ETF (NYSEARCA: IYM ) is the top-rated Materials ETF and the Fidelity Select Chemicals Portfolio (MUTF: FSCHX ) is the top-rated Materials mutual fund. IYM earns a Neutral rating and FSCHX earns an Attractive rating. The PowerShares S&P SmallCap Materials Portfolio ETF (NASDAQ: PSCM ) is the worst-rated Materials ETF and the ICON Materials Fund (MUTF: ICBAX ) is the worst-rated Materials mutual fund. PSCM earns a Dangerous rating and ICBAX earns a Very Dangerous rating. 168 stocks of the 3000+ we cover are classified as Materials stocks. LyondellBasell Industries (NYSE: LYB ) is one of our favorite stocks held by Materials ETFs and mutual funds and earns our Attractive rating. Since 2011, Lyondell has grown after-tax profit ( NOPAT ) by 11% compounded annually. Over the same timeframe, the company has improved its return on invested capital ( ROIC ) from 17% to a top-quintile 23%. While LYB is up nearly 20% year-to-date, shares could still have large upside for long-term investors. At its current price of $93/share, LYB has a price to economic book value ( PEBV ) ratio of 1.0. This ratio implies that the market expects Lyondell’s profits to never grow from current levels. If Lyondell can grow NOPAT by just 5% compounded annually for the next five years , the stock is worth $115/share today – a 24% upside. Friedman Industries, Inc. (NYSEMKT: FRD ) is one of our least favorite stocks held by Materials ETFs and mutual funds and earns our Very Dangerous rating. Friedman’s NOPAT has rapidly declined since 2011, from $11 million to -$5 million in 2015. Friedman has also been inefficient at managing its invested capital , and its ROIC has fallen from 19% to a bottom quintile -7% over the same timeframe. Despite the struggling business, FRD has outperformed the overall market over the past six months and is now significantly overvalued. To justify the current price of $6/share, Friedman must immediately achieve positive pre-tax margins of 1%, (compared to -4% in 2015) and grow revenues by 20% compounded annually for the next 12 years . This scenario seems unlikely considering the company’s revenues and profits have only fallen over the past decade. Figures 3 and 4 show the rating landscape of all Materials ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs (click to enlarge) Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds (click to enlarge) Sources: New Constructs, LLC and company filings Disclosure: David Trainer and Blaine Skaggs receive no compensation to write about any specific stock, sector or theme. Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Fall Review: ‘Savvy Senior’ Portfolio (Betting On Horses To Finish The Race, Not To Win It!)

Summary Total return (paper profit) lags as high yield and related sectors remain in the market “doghouse”. But cash returns have grown by over 11% since a year ago. Yields and re-investment rates over 10%. Credit still represents a more attractive way to earn “equity returns” than real equity. In other words, it is safer to bet on your horses merely FINISHING the race, rather than their having to win it. As we review our “savvy senior” IRA portfolio partway through the 4th quarter of 2015, the trends mentioned in recent articles ( here and here ) continue unabated. These trends are: 1. Our deliberately income-focused portfolio continues to crank out a steady stream of distributions and dividends, currently yielding 10.9%. We see no economic reason for these highly diversified income streams not to continue indefinitely. 2. With the compounding effect of re-investing our cash dividends at these high rates, we have seen our income stream (the output from the portfolio that we think of as our income “factory”) grow to where it was 11.5% higher for the first 9 months of 2015 than it was for the first nine months of 2014. This growth should also continue, as long as we continue to re-invest income, which the IRA structure encourages. 3. Even though the “factory” is producing 11.5% more current income than it was a year ago, the market has continued to value the asset classes we own – high yielding bonds and loans, high yielding structured vehicles (i.e. collateralized loan obligations), MLPs, BDCs, and closed end funds in general – pretty negatively. 4. This has lowered our total return (cash income plus market appreciation or depreciation) to date in 2015 to a negative (- 2.97%), while also providing us with some terrific re-investment opportunities, with numerous solid, well-managed closed end funds sporting discounts in the teens. Overall Strategy To use a horse race betting analogy, my investment philosophy is like betting on a whole lot of horses to “finish the race” rather than on individual horses to “win the race.” Most of the funds I own are credit or credit-oriented investments rather than investments in equity. When you invest in credit funds you are betting that the companies in the fund will merely stay in business (i.e. pay their bills and not go bankrupt). That’s a pretty low hurdle. Yet by making credit investments via the closed end fund market, you can earn what I consider a pretty steady “equity” return of 9-10%. That is because you start with high-yield companies that pay interest rates on their debt of 5 to 8%. (High yield means non-investment grade, and remember that the great majority of all companies in the US and the world are non-investment grade companies, so we should not let the term “high yield” or even “junk” scare us. High yield debt – bonds and loans – had historically high default rates as one would expect during the recession, but as asset classes they performed well and investors who held on and didn’t sell in a panic made out very well.) You put those in a closed end fund structure where you can often buy at a discount, which adds another 50 or 100 basis points, and then you add in the benefit that CEFs can leverage themselves modestly (less than one-half times) which may add another 200 basis points or so, and you are up to yields in the high single-digits and higher. As I’ve written before, I sleep well with this sort of a strategy. A bet on hundreds or maybe thousands of companies staying in business, paying their bills, or if they are utilities and other types of infrastructure companies, continuing to operate and pay their dividends, seems like a more reasonable and predictable bet than an equity bet, where the company has to not only survive, but grow and increase its dividend over time for the bet to pay off. (Some of my funds are equity funds too, mostly of the high-yielding dividend variety, but the bulk of the portfolio consists of credit-oriented investments.) My approach seems compatible with the current economic situation, where it seems we are on track for steady but hardly spectacular domestic growth, within a weak global economic context, and a volatile domestic and global political context. That suggests that interest rates, when they do rise here in the US, won’t rise by much; and that inflation is pretty well contained as well, given that wages in the US (for ordinary workers, not for CEOs) are held down by the global outsourcing option and the continuing post-recession reluctance of many businesses to add permanent workers. This situation – slow growth in the US, but lots of overall uncertainty – suggests to me that a somewhat predictable 10% return (received in cash and immediately re-investable) from credit risk beats a less predictable higher return from taking equity risk. Some other more traditional equity-oriented, dividend-growth approaches have done better so far this year than my approach from a total return (i.e. paper profits) perspective, but the dividend yield (i.e. money in the pocket) has been far less. Here are some examples: · Vanguard’s Dividend Appreciation ETF (NYSEARCA: VIG ): YTD total return of – 0.76%, with a yield of 2.28% · Vanguard’s High Dividend ETF (NYSEARCA: VYM ): YTD total return of 1.66%, with a yield of 3.1% · ProShares S&P 500 Dividend Aristocrats (NYSEARCA: NOBL ): YTD total return of 0.96%, with a yield of 1.89% · SPDR Dividend ETF (NYSEARCA: SDY ): YTD total return 0.72%, with a yield of 2.44% · Vanguards’ Wellesley Income Fund (MUTF: VWINX ): YTD total Return of 2.52%, with a yield of 2.83% · Vanguard’s Wellington Fund (MUTF: VWELX ): YTD total return of 2.1%, with a yield of 2.58% I have attached my entire portfolio, listing the securities (most of which are closed end funds), their yields and premiums or discounts from NAV, the percentage each represents of the total portfolio income, and the percentage each represented back in April when I last posted the entire list. Readers will see that the previous list only accounts for 85% of the income from the current portfolio, which means 15% of the previous list’s income came from investments since eliminated and replaced. Those investments are listed separately at the bottom. New Positions Added: · Cohen & Steers MLP Fund (NYSE: MIE ), which I bought because it seemed some of the distribution, storage and transportation MLPs were being unfairly tarred with the same brush as the exploration and production MLPs, despite their being in different businesses. The market can’t make up its mind on this and MIE’s price gyrates wildly from day to day. Having sold at over 20 last year it is now in the 12’s, paying a 10% dividend. Seemed like a good opportunity to me. · Babson Capital Partners (NYSE: MPV ) , which is a decades old fund that buys and holds the sort of private placements that insurance companies like the fund’s parent Massachusetts Mutual have been doing successfully for years. I switched into this because it seemed like a nice “hunker down and forget it” sort of investment, paying close to 8%, with an 11% average annual return since 1988. · Cohen & Steer’s Infrastructure Fund (NYSE: UTF ) , which I’ve owned off and on with good results. It seemed that utilities were getting beaten up by the market unduly, so I created a new position in UTF, which I will be adding to in the future as well. Has been up over 22 and now sells under 20 and yields 8%. Cohen & Steers are long-time, experienced managers. (Similar thinking in the increased position in Duff & Phelps Global Utility Fund (NYSE: DPG ) . Yield of 8.5% with a 15% discount to NAV.) · Blackstone Long/Short Credit income Fund (BGX ) is essentially a loan fund. I think the long/short part means they have the authority to short loans and other instruments that they think may default. I opened the position because loans had taken what seems to me an unreasonable beating in the market and yields and discounts had gotten pretty attractive. Currently BGX is discounted 15% and yields 8.3%, which is pretty good for a fund that holds well-secured floating-rate loans (i.e. virtually no interest rate risk). · Nuveen Tax-Advantaged Total Return Strategy Fund (NYSE: JTA ) . I added a small position here when I read Douglas Albo’s valuable piece in mid-summer pointing out the unusual value this seemed to represent. Yields 8.88% and sports an 11.4% discount. Here is Doug’s article for anyone who wishes to read it. Some other changes to my portfolio: · Added to both Oxford Lane Capital (NASDAQ: OXLC ) and Eagle Point Credit (NYSE: ECC ) after attending OXLC’s annual meeting and then also meeting with ECC’s management. I think both funds have been beaten up price-wise unduly by (1) the general drop in high yield assets overall, (2) the fact that in both cases the traded stock as opposed to what is owned by institutions is apparently rather small and therefore the price bounces around a lot based on small volume while most of the stock sits quietly in the portfolios of long-term holders, and (3) the disconnect between reported GAAP earnings and the actual cash flows and taxable earnings from which distributions are paid is a bit too complicated for most investors to understand, despite recent efforts by the managements to try to explain it better. The confusion in the market about the effect of the Dodd-Frank legislation on the ability of new CLOs to be issued and/or held by their underwriters and managers doesn’t help either. My take on all this is that I will keep monitoring the funds’ quarterly reports to look for any signs that their cash flow is eroding or insufficient to pay their future distributions. So far both funds appear to have healthy future cash flows. I also know that lots of institutional investors made a lot of money holding CLOs in the past and the structure “works” as far as creating good returns for equity investors. The managers of both funds sound like they know what they’re doing whenever I’ve met with them. So for now, I’m in. · Third Avenue Focused Credit Fund (MUTF: TFCIX ). This fund has taken a pounding like all high yield bond funds. I cut my position in half because since it was a mutual fund, not a closed end fund, I could take my money out at the NAV and then re-invest it in similar assets, if I chose to, or even different assets, in any number of closed end funds, at a 10% or higher discount to their NAVs. So I figured if I were going to wait around for the market in high yield bonds to turn up, I might as well get paid a bonus for doing so. · For a similar reason I sold the PowerShares CEF ETF (PCEF ) and bought more of Cohen & Steers CEF Opportunity fund (NYSE: FOF ) . With FOF you can buy the shares at a discount, get active management as opposed to an index approach, and get a slightly higher yield. Some of the other moves represented an attempt to move out of equities and into specific credit-oriented securities that seemed particularly cheap and beaten down at the time (i.e. moves out of Eaton Vance Risk Managed Dividend Equity Income Fund – NYSE: ETJ – and Wells Fargo Advantage Global Dividend Fund – NYSE: EOD ) . Like many of my moves and portfolio tweaks, these were not because I disliked these funds, but because I saw particular opportunities on occasions in other funds. Often in the closed end fund market, because prices and discounts can be so quirky, it is a case of saying “This looks too good to be true. What can I sell to take advantage of it?” So you end up selling a position you are perfectly happy with, in order to buy something you are even happier with. (My Income Manager excel spreadsheet, that some of you also use, allows me to see at a glance as I add or subtract positions in the portfolio, what the impact is on the annual cash distribution of the entire portfolio. Anyone who wants a copy, please send me a message with your actual email address and I’ll send it to you. It’s not fancy but it works. Helps to refocus attention from the market value of the “income factory” to what the output of the factory is.) Hope that’s useful and/or interesting. As Porky Pig used to say, “That’s all, folks!” Savvy Senior Portfolio 10/29/2015 Symbol Current Yield CEF Premium/ Discount Portfolio Income % This Holding Portfolio Income % Last April Increase/Decrease as % of Portfolio income Eaton Vance Limited Duration EVV 9.22% -12.49% 10.41% 6.8% 3.57% Oxford Lane Capital Corp. OXLC 21.07% -17.94% 7.95% 4.2% 3.78% Eagle Point Credit Co. ECC 14.18% 6.95% 7.22% 3.8% 3.45% Pimco Dynamic Credit Income Fund PCI 10.44% -13.33% 7.15% 7.3% -0.17% Cohen & Steers CEF Oppty Fund FOF 9.04% -11.67% 6.52% 5.8% 0.74% Calamos Global Dynamic Income Fund CHW 11.04% -15.25% 4.37% 2.7% 1.64% First Trust Specialty Financial Oppty Fund FGB 11.24% -1.27% 4.37% 2.3% 2.02% Ares Dynamic Credit Allocation Fund ARDC 9.78% -15.43% 4.21% 4.73% -0.52% Cohen & Steers MLP Fund MIE 10.51% -11.61% 4.15% 0.00% 4.15% Pimco Income Strategy Fund II PFN 10.39% -6.29% 3.86% 4.15% -0.29% Nuveen Real Asset Inc & Growth Fund JRI 9.01% -8.19% 3.50% 3.76% -0.26% UBS ETRACS Leveraged CEF CEFL 21.90% NA 3.38% 3.80% -0.42% Babson Capital Global Shrt Duration HiYld BGH 1.97% -12.62% 3.17% 1.41% 1.76% Duff & Phelps Global Utility Fund DPG 8.59% -15.02% 2.93% 1.27% 1.66% Third Avenue Focused Credit Fund TFCIX 9.97% NA 2.92% 7.23% -4.31% UBS ETRACS Leveraged REIT MORL 23.70% NA 2.70% 2.90% -0.20% First Trust Inter. Duration Pfd & Inc FPF 8.94% -7.98% 2.61% 2.30% 0.31% Babson Capital Partners MPV 7.96% -0.59% 2.51% 0.00% 2.51% Eaton Vance Tax Mgd Global Div Inc Fund EXG 10.66% -8.22% 2.32% 3.83% -1.51% Pimco Income Opportunity Fund PKO 9.66% -3.24% 2.19% 0.26% 1.93% Cohen & Steers Infrastructure Fund UTF 8.07% -16.93% 1.85% 0.00% 1.85% TICC TICC 18.07% NA 1.79% 1.79% 0.00% Blackstone Lg/Sht Credit income Fund BGX 8.30% -15.35% 1.61% 0.00% 1.61% John Hancock Pref Income HPI 8.43% -8.79% 1.12% 2.86% -1.74% Eaton Vance Tax Mgd Global Buy Write Fd ETW 9.89% -1.58% 1.07% 3.58% -2.51% Western Asset High Income Fund HIX 11.95% -8.82% 1.02% 1.09% -0.07% Nuveen Tax Advantaged Total Return Fund JTA 8.88% -11.42% 0.85% 0.00% 0.85% Brookfield High Income Fund HHY 12.06% -11.30% 0.80% 2.61% -1.81% Nuveen Preferred Income Oppty Fund JPC 8.70% -10.47% 0.80% 3.10% -2.30% Voya Natural Resources Eq Income Fund IRR 13.33% -16.30% 0.66% 0.89% -0.23% 100.00% 84.53% Positions Eliminated Previous % of Portfolio Income Eaton Vance Risk Mgd Div Equity Income Fd ETJ 4.20% Wells Fargo Advantage Global Div Fund EOD 3.00% Credit Suisse High Yield DHY 1.70% THL Credit Senior Loan Fund TSLF 1.60% Wells Fargo Advantage Inc Oppty Fund EAD 1.40% VOYA Global Advantage Fund IGA 1.00% Powershares CEF ETF PCEF 1.00% Cohen & Steers Ltd Dur Pref Inc Fund LDP 0.90% First Trust Strategic High Income Fund FHY 0.60% 15.40%