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Make 9.4% annualized by year-end

#1
For those of you who followed me on the closed-end fund DHG, this is my new idea, KMM.
 
KMM is the Deutsche Multi-Market Income Trust, which is a term closed-end fund.  The fund currently trades for $8.81.  The fund invests in corporate high yield bonds (73%) and loans (18%).  It's geographically 76% in the U.S. and 9% in Canada.  The fund will liquidate by end of this year, so there's 0.556 years left before you get your money back.  The effective duration is 3.51 years. 
 
The fund trades at a 2.76% discount to NAV, which will obviously disappear by the time the fund liquidates in December.  On an annualized basis, the closing of the discount will yield 4.96% (=2.76%/0.556yrs).  The dividend is currently $0.0325 per month, so 4.43% annualized.  Hence, between the discount and annualized dividend, I expect a total annualized return of 9.39% (=4.96%+4.43%).
 
This will be the third term closed-end fund I own to maturity.
 
Enjoy & good luck!
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#2
Do you have to pay foreign taxes on this fund?
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#3
Deutsche Bank is not regarded very well in the market place, which has nothing to do with the fund. Yet, they are the custodian and there is some questions being raised about their solvency. There are plenty of multi-sector closed end bond funds. I own BIT(Black-rock), pays monthly pretty well.
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#4
(11-28-2018, 02:13 AM)Abe Wrote: Deutsche Bank is not regarded very well in the market place, which has nothing to do with the fund. Yet, they are the custodian and there is some questions being raised about their solvency. There are plenty of multi-sector closed end bond funds. I own BIT(Black-rock), pays monthly pretty well.

You are right, there are plenty of closed-end bond funds to choose from.  However, there are very very few bond funds which liquidate in less than seven months and allow you to capture the discount to NAV.  That's the whole point of this type of investment.
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#5
I like this suggestion. BIT Pulled up a chart 3 and 5 yr - just one thing I look at, but couldn't help noticing strong Head and Shoulders formation. Just thought that was interesting.
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#6
Not sure why I should consider BIT if my principle goes down over time??? Regardless of the monthly div. Alternatively I would consider MAIN or GAIN instead.

Am I missing the point here?

Your opinion pl.
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