The Fed Is Juicing These 3 Massive Monthly Dividends

Core Viewpoint - The Federal Reserve's recent quarter-point cut to the federal funds rate is expected to positively impact preferred stocks, which offer higher yields, with some funds yielding up to 9.8% and paying monthly dividends [2][6]. Group 1: Preferred Stocks Overview - Preferred stocks are hybrid securities that combine features of both stocks and bonds, typically offering higher payouts than common shares [3]. - These securities often trade like bonds, making them particularly attractive when interest rates decline [4]. Group 2: Closed-End Funds (CEFs) - Closed-end funds can utilize leverage to enhance their portfolios and payouts, potentially increasing returns by 10% to 30% [5]. - CEFs often trade at discounts to their net asset values (NAVs), providing an opportunity for investors to acquire assets at lower prices [10]. Group 3: Specific Funds and Their Characteristics - Cohen & Steers Limited Duration Preferred and Income Fund (LDP): Offers a distribution rate of 7.2%, focusing on preferreds with lower overall duration and a diversified portfolio of 260 preferred payers, with 50% from U.S. companies [7][9]. - John Hancock Preferred Income Fund III (HPS): Provides an 8.6% yield, with a strategy that includes a significant portion of investment-grade preferreds and a higher leverage of 37%, leading to increased volatility [11][12]. - Nuveen Preferred & Income Opportunities Fund (JPC): Delivers a 9.8% dividend with 80% investment-grade quality, balancing yield and safety, while also employing high leverage [15][16].