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Cash Machine Picks a Premium Tech Growth Fund
10/04/2019 5:00 am EST
Having some pure technology exposure in the current market landscape should pay off well during the second half of the year, as the fourth quarter is seasonally the strongest for technology spending budgets, suggests Bryan Perry, growth stock expert and editor of Cash Machine.
Fund managers seeking to up their portfolio weightings are ploughing money into the tech space. In harnessing this fresh wave of investor interest that would satisfy our high-yield profile, I'm going this month with a closed-end covered-call fund that owns a portfolio of 100% technology stocks.
Columbia Seligman Premium Technology Growth Fund (STK) is a closed-end, covered-call fund that owns a portfolio of 100% technology stocks. It has been a previous holding that we have profited from twice.
With the economy and the tech sector behaving much better as the third quarter comes to a close, the risk/reward proposition and forward visibility have improved a great deal. Shares of STK boast a current yield of 8.80% made up of call option premium, capital gains and no return of capital.
STK shares have been working their way higher of late. As the market continues to favor technology growth stocks and high-yield assets in general, STK offers a highly attractive combination of tech sector exposure with a double- digit-percentage yield.
The management team has proven over the past decade that it very much knows what it is doing in navigating the tech sector for income investors. Since inception back in 2009, the fund has met or outperformed the S&P 500 consistently, never missing a dividend while exhibiting excellent stock selection year in and year out.
The annual dividend of $1.85 is deemed a managed distribution that pays $0.4625 per quarter and has been doing so going back to 2009. The stock itself is showing bullish technical action and should trend nicely higher with the broader Nasdaq.
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