In recent years, the bad rap on closed-end bond funds is that they couldn't thrive in a rising rate environment. Now, the Fed is ready to hit "pause" indefinitely (traders are pricing in only a 6% chance of any rate hike in 2019), asserts Brett Owens, closed-end fund specialist and editor of Contrarian Outlook.

Yet basic investors haven't yet loaded up on funds that hold fixed-rate bonds with generous yields. Speaking of which, let's talk about an old friend, the Aberdeen Asia-Pacific Income Fund (FAX).

I issued a sell recommendation for FAX in May 2018 because its NAV was heading the wrong way. Rising rates were pressuring the value of the fund's fixed-rate bond portfolio, and those bonds weren't paying enough for FAX to pay its dividend without price appreciation help.

Fast-forward to October and the financial winds shifted. This has helped FAX's portfolio, which has actually increased in value as broader markets have unraveled. This shift is not yet reflected in the fund's price, which has drifted 16% below its NAV.

FAX has paid the same $0.035 monthly dividend since 2002, which is now good for a 10.5% yield on its depressed share price. If the fund can continue paying its distribution while grinding its NAV sideways or better, it's a steal at these levels.

How can the fund be so cheap when the facts surrounding interest rates have obviously changed? As I've pointed out before, the Internet doesn't understand FAX. Through the years we've seen some well-publicized (and highly amateur) analysis of the fund floating around online that completely misses the mark.

Here's what the fund has accomplished in its storied 30-year history. It's achieved 595% total returns (including dividends) since inception; it's paid the same reliable monthly distribution since 2002, and it has delivered 7.7% annual gains on its NAV since inception.

The fund tends to trade lower when there are broader China worries (such as trade wars) because FAX has "Asia" in its name. I kid you not. But we're better than this, so let's look at the bonds that the fund actually holds in its portfolio; its top 10 holdings feature safe bonds issued by the national governments of Australia, and Indonesia as well as an Australian provincial government and one Chinese bank.

These make up nearly one-quarter of the fund's portfolio. In fact, 68% of FAX's holdings are investment grade. It's time for us to buy it back and start banking this 10.5% dividend as we wait for the fund's price to catch up to its rising NAV.

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