Sold ADAMH (3.8%)

Nothing wrong with ADAMH, this sale was opportunistic. These baby bonds trade around their $25 par value, and I just took some profits. Will happily buy it back again if the price is right. ADAMH will be “Callable” beginning Oct 1, 2027, meaning the issuer will have the right to buy it back at $25 plus accrued interest. 

Therefore you won’t want to own it at much more than $25 from that date, but it’s more than a year away, so no need to sell it anytime soon. I traded it for NLY.PR.G, as explained below. Depending on your cost basis, it may make more sense to just hold this one.

Sold SPYI (2.8%)

I’m a NEOS fan, but the S&P 500 income niche has become very competitive! Traded this one for OVL. The OVL yield is less (10.5% versus SPYI at 12%) and the risk/volatility is slightly higher. The reason for the switch is that OVL has a higher potential total return. The chart below shows a comparison beginning with the launch of SPYI. OVL has outperformed SPYI and the S&P 500. I maintain a covered call S&P 500 position with GPIX.

Reduced UTF (from 2.65% to 1.65%)

This is one of my favorite utility funds (the other is UTG). I trimmed it to take profits, and also because the appreciation caused the yield to dip below 7%. I consider PTY and/or MLPI a better opportunity at the moment. If this one dips again I’ll happily add to my position.

Bought Annaly Capital Preferred Shares / Series G (2.8%)

This preferred share is trading below its $25 par, which is important because it’s callable at $25. The distributions are variable, so the income will rise or fall based on what the Fed does (so probably no dramatic changes in the near to medium term). It’s a place to park cash for the short to medium term and receive a yield of at least 8%. 

Annaly Capital is an mREIT, and despite their attractive yields, I generally avoid common shares of mREITs based on their (high) risk level. However, this one dates back to 1997, is less risky than its peers, and preferred shares are considerably less risky than common shares as they are first in line to get paid. 

Tickers for preferred shares vary by brokerage and website. Seeking Alpha uses NLY.PR.G, Snowball uses NLY-PG, Interactive Brokers uses NLY PRG, Schwab uses NLY/PRG. If in doubt, enter “NLY” and let the predictive text present options.

Bought OVL (2.8%)

OVL uses a put spread strategy to boost extra income and performance out of the S&P 500. There’s no free lunch, so the price of admission is… slightly higher volatility. My expectation is that GPIX will outperform the S&P 500 during a bear market, and OVL will outperform it during a bull market. 

If you missed the recent episode featuring Eric from OVL, he explains the strategy in detail. Here’s a link to the OVL interview.

Increased PTY (from 1.8% to 2.8%)

This fixed income fund yields 12% and has a long history of consistent distributions. In recent years it has been priced well above its Net Asset Value (often at a 20% premium or more). I think it’s oversold, so it was an opportunity to pick some up at a price close to NAV. The thinking behind this move, and why I chose to add to PTY over PCN or PDI, was covered in this recent episode about Pimco Funds.

Increased MLPI (from 1.5% to 2.5%)

This covered call energy ETF is focused on Midstreams in the energy sector, and is currently yielding just over 14%. Midstreams are operators that store, transport and process oil and gas from the US and Canada. They’re paid on volume rather than the price of energy, so the revenue is less volatile than you’ll find from the big energy producers like Exxon Mobil or Chevron. The future of energy transport through the Hormuz Strait remains unclear, and I anticipate that demand for North American energy is likely to remain strong. If you’re not familiar with MLPI, the Fund Manager, Garrett, explained it in this MLPI interview.