CGDV Dividend: A Deep Dive into the 5.98% Yield

Introduction

CGDV, an actively managed closed-end fund, stands out with its attractive 5.98% annual dividend yield. This dividend has been consistently paid and increased over time, making CGDV an income-oriented investor's dream.

Asset Allocation and Investment Strategy

CGDV primarily invests in investment-grade corporate bonds and government securities. As of December 31, 2022, the fund's portfolio held 60.3% in corporates and 39.7% in governments. The average maturity of the portfolio was 9.4 years, providing a stable stream of income for shareholders.

Historical Dividend Performance

CGDV has an impressive track record of dividend payments. The fund has paid dividends every year since its inception in 1993, and has increased the dividend rate annually for the past 10 years. In 2022, CGDV declared a dividend of $0.82 per share, representing a 5.98% yield based on the fund's current share price.

Fees and Expenses

Like all closed-end funds, CGDV charges fees and expenses to cover its operating costs. The fund's management fee is 1.00% per year, which is in line with similar funds in the industry. CGDV also incurs other expenses, such as accounting, legal, and administrative fees, which totaled 0.36% in 2022.

Advantages of Investing in CGDV

• High Dividend Yield: CGDV's 5.98% dividend yield is significantly higher than the average yield of comparable fixed income investments.
• Consistent Dividend Payments: The fund has a long history of paying and increasing its dividend, providing investors with a reliable source of income.
• Diversified Portfolio: CGDV's diversified portfolio of bonds reduces risk and provides exposure to a range of issuers and maturities.
• Active Management: CGDV is actively managed by a team of experienced investment professionals who make investment decisions based on market conditions.

Disadvantages of Investing in CGDV

• Management Fees: CGDV's management fee of 1.00% is higher than that of some passively managed funds.
• Potential for Capital Loss: As with any fixed income investment, there is a risk of capital loss if interest rates rise, as bond prices tend to fall in such environments.
• Liquidity Risk: Closed-end funds trade on exchanges like stocks, which can result in some liquidity risk, meaning there may not always be a ready market for shareholders to sell their shares.

Conclusion

CGDV is an attractive investment option for income-oriented investors seeking a high dividend yield. The fund's long history of dividend payments, diversified portfolio, and active management make it a compelling consideration for investors looking for a stable source of income. However, investors should also be aware of the fund's fees and expenses, as well as the potential risks associated with fixed income investments.