This “Dark Horse” Play on Rising Rates Yields 7.5% (With Gains Ahead)

There’s an opportunity unfolding for us in one corner of the closed-end fund (CEF) market, and we can tap it for 7.5% dividends and price upside, too. That opportunity is in CEFs that hold preferred shares. And it includes a CEF called the John Hancock Preferred Income Fund II (HPF), which not only pays a 7.5% dividend but is positioned to grow its payout. So every $100,000 you put into HPF gets you $625 a month in income, versus $119 a month you’d get from the typical S&P 500 stock. And that’s just to start. If you’re unfamiliar with preferreds, they’re like the common stocks most people buy except they pay higher dividends (preferreds typically pay 4% or more, versus the average sub-2% yield on common stocks).… Read more