Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| This
Safe Fund Yields Over 9% |
Published: November 27, 2006
Snapshot: Over half of the Zweig Total Return
Fund's (NYSE: ZTR) portfolio is in risk-free U.S. Treasuries. The
balance is mostly in blue-chip dividend-payers like pharmaceutical giant
Bristol-Myers (NYSE: BMY) and chemical maker Dow Chemical (NYSE: DOW).
The bonds carry the highest credit rating possible with virtually no
risk of default. They have an average duration of about six years,
making the fund well positioned for a stable interest rate environment.
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Dividend:
The fund has paid dividends every month for the past two decades. Its
latest monthly payment of $0.043 a share equates to $0.52 annually,
providing a 9.3% yield at today's share price. A 1.02% management fee
brings the effective yield to 8.3%.
The fund follows a managed distribution policy, which virtually
guarantees investors receive a fixed monthly income. As we have
described in our premium High-Yield
Investing newsletter, the downside of a managed distribution
policy is that management may chip away at a fund's asset base to meet
its monthly payments if its interest income and capital gains do not
provide enough distributable income. That's why we zeroed in on a fund
that has increased its asset base while still providing a set monthly
income to shareholders. The distribution represents 10% of the fund's
net asset value. So far this year, the fund's net asset value has grown
+6.65%, which bodes well for future dividend hikes.
The distribution comes from investment income earned on the fund's
stocks and bonds, capital gains, and return of capital. For 2005, 47% of
the fund's distribution was taxed as ordinary income, 46% was a
non-taxable return of capital, and 7% qualified for the lower dividend
tax rate.
The fund's Automatic Reinvestment Plan allows shareholders acquire
additional shares in lieu of cash distributions. You can contact the
fund at 1-800-272-2700 for more information on this plan.
Performance: The fund's diversified portfolio of
stocks and bonds helped it weather a difficult first half of 2006. Gains
in the fund's stock holdings more than offset losses in its bond
portfolio due to rising interest rates. In addition, the fund protected
its assets by moving into cash and by taking short positions. As a
result, for the six months ended June 30th, the fund's net asset value
gained +0.52%, including reinvested distributions.
More recently, the fund benefited from the sharp rally in the Treasury
market in the past few months. The benchmark 10-year Treasury note fell
from a 5.15% yield at the end of June to a 4.61% yield at the end of
October. Since bond prices move in the opposite direction of yields, the
value of the fund's bond holdings rose during the period. The +8.5% rise
in S&P 500 over the same four-month stretch was also favorable for
the fund's equity holdings.
Valuation/Outlook: Over the past three years, the
fund has averaged healthy annual returns of +13%, and so far this year,
ZTR has returned an impressive +28% to shareholders. For the past three
years, the fund has traded at a discount to its net asset value, but the
recent rise in the value of Treasuries has attracted buying interest. As
a result, the fund is now selling at a 7.9% premium and its shares are
trading near their 52-week highs.
ZTR's share price moves up and down with U.S. Treasuries. However, under
the expert hand of seasoned portfolio manager Dr. Martin E. Zweig, its
diversified stock/bond portfolio has continued to add value whether
interest rates were rising or falling. The fund's share price may rise
or fall in reaction to the Federal Reserve's next interest rate decision
on December 12th, but whatever happens at that time, we expect the
fund's diverse portfolio of stocks and bonds to continue to generate
secure distributions as it has every month since 1988.
Action
To Take --->
With its high-quality portfolio of Triple-A bonds and blue-chip stocks,
this fund is a solid long-term investment with low to medium risk.
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Editor's
Note: Carla Pasternak's model portfolios focus exclusively
on investment opportunities with ultra-high yields. In fact, in each
of her monthly High-Yield Investing newsletters she
provides readers with an entire portfolio of stocks, funds and
preferreds that are delivering annual dividend yields of +10% or
more. That's right -- in order to even be considered for
inclusion in this portfolio, an investment
must deliver cash payments of at least 10% per year. Visit
this link to learn more about Carla Pasternak's High-Yield
Investing newsletter.
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Good investing!
Carla Pasternak
Editor
High-Yield Investing
http://www.StreetAuthority.com
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receive in-depth guidance on today's leading income investing
opportunities each month, plus access to several model portfolios,
please subscribe to Carla Pasternak's premium newsletter -- High-Yield
Investing. |
Carla
Pasternak draws on a variety of financial backgrounds to make profitable
calls on income-generating stocks for her readers.
Carla has
been employed in the investment industry for more than two decades. In
addition to her work as a writer for several other nationally recognized
financial publishers, her previous experience includes a position as
President of a well-respected investor relations firm. She has also been
writing shareholder reports for public companies (annual reports,
speeches, corporate profiles, slide shows, etc.) since 1980.
A highly
successful investment analyst, Carla specializes in high-yield,
income-paying stocks. In that pursuit, she's always mindful to select
companies that not only pay rich dividends, but that also have the
potential to deliver strong long-term capital gains.
On the
educational front, Carla holds both MBA and Ph.D. degrees. When she's
not watching the market, she's teaching business courses at the college
level and managing several million dollars in portfolio assets.
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