US Closed-End Funds with High Dividend Returns and the $7.4B Air Lease Deal

Have you ever considered investing in closed-end funds? Imagine an investment vehicle capable of delivering stable returns of 10-12% annually while allowing you to "buy a dollar for 80-90 cents." That's the opportunity emerging with closed-end funds in the US, especially following the recent $7.4 billion acquisition of Air Lease Corporation.

Over the past 12 months, US closed-end funds have recorded an average return of 13.8%, significantly outperforming the S&P 500's 11.2%. What's particularly striking is that many of these funds are still trading at discounts of 5-15% to their net asset value, creating attractive "buy low, sell high" opportunities for savvy investors.

Unlike traditional open-end funds, closed-end funds operate like listed companies with a fixed number of shares. When market demand decreases, trading prices can fall below the actual value of underlying assets. This is when opportunities arise - similar to buying a house worth $1 billion for just $850 million.

Do you know how to capitalize on discounts when buying closed-end funds? The simplest strategy is to seek funds with discounts above 8%, stable dividend histories of at least 5 years, and focus on sectors with predictable cash flows like real estate, infrastructure, or corporate bonds.

Currently, several notable closed-end funds are attracting attention, including Blackstone Credit Income Fund (BCRED) with an 11.2% yield, Ares Capital Corporation (ARCC) paying 9.8% dividends, and Cohen & Steers Infrastructure Fund (UTF) offering an 8.9% dividend yield. Over the past decade, these funds have maintained average annual returns of 9.5-12.3%, significantly higher than government bonds or bank deposits.

The Air Lease Corporation deal valued at $7.4 billion has heated up the closed-end fund market by demonstrating the strong appeal of stable cash-generating assets. Air Lease - the global "aircraft leasing king" - owns over 400 aircraft with an average age of just 6.8 years and long-term lease contracts with 100+ airlines worldwide.