Many income investors make a common mistake that can be quite costly. It’s related to lost income and lost profit, and it often begins with a seemingly harmless tool—a stock screener that you probably use regularly, such as Google Finance or Yahoo Finance.
This issue impacts all high-yield stocks, and it becomes more pronounced as the yields increase. So, for anyone investing, the topic at hand—particularly with Closed-end funds (CEFs)—can indeed be a bit perplexing.
The positive side? This error is easily rectifiable.
To illustrate this, let’s take a high-yield CEF from my own portfolio. The firm I’m referring to is well-managed, yielding 7.5%, and it’s been a market leader for over a decade. Yet, if you fall into the traps we’re going to discuss, you might overlook this fund at first glance.
Specifically, I’m talking about the BlackRock Science and Technology Trust (BST). This CEF includes major tech names like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). So along with the 7.5% dividend, there’s potential for significant long-term growth. Let’s examine its performance over the last decade.
BST’s impressive growth fueled by technology…
Currently, BST’s market price has increased by 130.4% from ten years ago, which is quite an achievement. But since we’re looking at a fund, we need to measure it against the S&P 500. Let’s compare it to a popular ETF tracking this index (with BST in purple and index funds in orange).
…But what about market trends?
This chart shows that the S&P 500 has been more technology-heavy than BST, which appears to have struggled over the last decade. Could this mean that BST is underperforming?
Or perhaps not?
Total return160+% more profits with BST…
The graph reveals two figures: the purple line representing BST’s 130.4% price increase over ten years, while the orange line depicts a 408.5% total return for the fund. Quite a difference, right?
When we compare BST’s total return to the benchmark index, the S&P 500—reflected in orange—has shown some growth but remains behind BST (in purple).
…and outshine the market.
Suddenly, BST appears to be significantly outperforming the market, yielding substantial profits. A hypothetical investor who put $10,000 into this fund back in 2016 would now see a profit of $40,850, far surpassing the $13,040 earned by a typical investor in BST, as seen in the initial chart.
So, what’s the takeaway here?
…With total return of 408.5% success stories
There are two primary ways to assess stock and fund performance. One focuses on market price returns, while the other considers total market price returns, which include dividends. Market price returns only consider price changes of a stock or fund, while total returns account for dividends, assuming they were reinvested.
Most popular stocks have low dividends—Nvidia at 0.02%, Apple at 0.4%, and MasterCard (MA) at 0.6%—which might not attract mainstream investors.
This leads to most free stock screeners neglecting total returns, focusing solely on price changes. For instance, a search for BST on Google Finance, checking its performance since its IPO, might look like this.
And now compare that view to a chart of total return, which factors in all the dividends since its IPO.
There’s a substantial difference, right?
Keep in mind that CEFs like BST typically prioritize distributing most of their profits as dividends. The average yield for S&P 500 stocks sits at 1.1%, whereas CEFs can offer around 8.9%, since many don’t pay dividends.
This means that observing just the market price of a CEF misses a significant piece of the story. So, caution is needed when researching CEFs online.
Kick off 2026 with substantial payouts (59 more to come!)
As we approach 2026, imagine your portfolio functioning as a well-oiled monthly distribution machine!
Picture receiving cash deposited into your account five times each month, totaling 60 dividend “paychecks” in the next year.
Your average yield? A nice 9.3%.
That’s exactly what I’m eager to help you achieve as the new year begins. The focus is on selecting funds that provide reliable monthly payments.
- High and robust yield: Yes, averaging 9.3%. So for every $100,000 you invest, you stand to gain $9,300 annually.
- Instant diversification: These five funds span various sectors, including top stocks, bonds, REITs, and more.
- Considerable discounts: As these exceptional prices stabilize, it can drive price increases.
I have created a comprehensive investor report detailing these five lucrative monthly payers and how they will generate 60 streams of dividend income throughout 2026. Click here to access the special report unveiling their names and tickers. This could prove to be one of your best investment decisions this year.
