There’s a simple mistake that every income investor makes sometimes.
It’s expensive, on both counts lost income And missed profitAnd it starts in perhaps the most innocent place: the free stock screeners you probably use every day — Google Finance and Yahoo Finance chief among them,
This slip affects All High Yield Stocks. In fact, the higher the yield, the more it can steer you in the wrong direction! So for those of us who invest in closed-end funds (CEFs), what we’re going to discuss today can cause real confusion.
Good news? We can easily fix this mistake.
To show you how, I choose a high-yield CEF from my portfolio CEF Insider Service. It’s smartly run (by the world’s largest asset manager, no less), yields 7.5% and has crushed the market for over a decade. But if you make the mistake that we are going to talk about today, you can easily take a look at this fund and ignore it.
The fund I am talking about is BlackRock Science and Technology Trust (BST)A CEF that includes several leading technology stocks Apple (AAPL), Microsoft (MSFT) And nvidia (nvda)So you would expect it to have strong long-term returns, in addition to its 7,5% dividend, Let’s see how this went over the last decade,
Tech-Powered BST Doubles (And Then Some)…
At the time of writing, BST’s market cap is 130.4% higher than it was a decade ago. It already feels good, right? But since this is a fund sharesWe should compare it to the S&P 500. So let’s do this using the “go-to” ETF that tracks a benchmark index. (BST is in purple below; index funds are in orange.)
…but still cornered by the market?
Look at this chart–the S&P 500, with Less Technical performance compared to BST has crushed BST in the last decade! Then again, BST is clearly useless?
or is it?
total return Increase BST’s profits…
The chart above shows two numbers: The purple line is the one you have already seen, showing 130.4% of BST. net profits (Remember that phrase for a second) over the last decade. However, the orange line represents 408.5% total return For the fund. This is clearly too much.
And if we take it a step further and compare total return For BST with benchmark indices, we see that the S&P 500 (in orange below) performed slightly better than our previous chart, but is still Well Behind BST (in purple):
…and take it to market
Now, suddenly, BST has crushed the market And Delivered huge profits. Investors who invested $10,000 in this fund in 2016 would have made a profit of $40,850. this is one Very The first chart showed a hypothetical BST investor receiving over $13,040.
So what’s happening here?
Total Story on 408.5% win
There are two ways to measure the performance of a stock or fund.
one after seeing this market price return. the second is seeing this total market value return. The only difference between the two is the dividend: with market-value returns, we just look at the stock or fund. current The market price and what it was in the past, then we calculate the difference.
with total market value come back, you’ll find it And All dividends paid by the fund, assuming they were reinvested on their payment date.
Now, since most popular stocks don’t pay much dividends – NVIDIA yields 0.02%, Apple yields 0.4% and Mastercard (MA) To name just a few examples yields of 0.6% – it doesn’t mean much to mainstream investors.
As a result, most free stock screeners don’t care about total returns and simply tell us how the stock price has changed. Here’s what BST looks like if you search it on Google Finance and zoom out to see how it has performed since IPO:
Now compare that to this total-return chart, which includes all the dividends paid by the fund since its IPO:
Big difference, right?
Remember that, like BSTs, CEFs focus on paying out most of their returns in the form of dividends. Average tracked by CEF CEF Insider The yield is now 8.9%, compared to 1.1% for the average S&P 500 stock (many paying no dividends at all).
This means that if you look at a simple market-value chart of a CEF without looking at dividends, you’re looking at a chart that doesn’t include most of the story. So we need to be careful when researching CEFs on the internet.
Start 2026 off with your first big dividend “paycheck” (and 59 more to come!)
what if i told you this NowAs we enter 2026, we’re going to bend even more—absolutely, maybe even All– in your portfolio a well oiled monthly dividend machine,
I’m talking about a constant cash flow that comes into your account 5 times a month, in total 60 dividend “paychecks” over the next 12 months.
Your average yield? A prosperous 9.3%.
That’s exactly what I want to help you do in the early days of the new year. And the 5 monthly payment funds I’m emphasizing today are key. They claim:
- High, strong yields. That’s right: an average of 9.3%! So you’re getting $9,300 per year on every $100K invested here.
- Quick Diversification: These 5 funds come from across the market, holding top stocks, bonds, REITs, and more.
- deep discount, Which will help increase their prices once these unusual markdowns stop.
I’ve put together a full investor report that tells you all about these 5 wealthy monthly payers and shows you how they’ll jump start your $60-dividend income stream for 2026. Click here to read it and get a free special report revealing the names and tickers of these 5 funds, This could be the best investment decision you take all year.
See also:
• Warren Buffett Dividend Stocks
• Dividend Growth Stocks: 25 Elite
• Future Dividend Aristocrats: Close Contenders
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Reflect the views of.
