A new trend is emerging in Silicon Valley that many investors may not be aware of: a shift towards paying dividends. This trend offers an opportunity for investors to earn high dividends in the tech sector, which is relatively unheard of. One example is a 9.3% dividend that continues to grow, which is a significant yield considering that most tech stocks, such as Meta Platforms and Alphabet, offer much lower dividends ranging from 0.5% to 3.3%.
Tech giants like Microsoft and Cisco Systems are leading examples of companies that have successfully converted their fast growth into regular dividend hikes. While their current yields may still be considered low, their history of dividend growth has had a significant impact on both long-term income and capital gains. They have managed to offer higher returns compared to non-tech stocks with higher dividend yields.
Despite the temptation to prioritize growth over income, some investors have found a way to achieve both by investing in high-yielding tech companies like Amazon.com, SPS Commerce, and Vertex through a closed-end fund called the Liberty All-Star Growth Fund (ASG). This fund, which focuses on growth stocks and has a strong portfolio, offers a 9.3% yield, as well as a 9.4% annualized total return from capital gains and dividends. ASG is easily accessible through online brokerages and provides an opportunity to generate passive income through regular special dividends.
The ability of ASG to increase its payout and deliver strong total returns makes it an attractive option for investors seeking high income and growth potential. The fund’s dividend payouts are tied to the performance of its underlying portfolio, allowing for flexibility based on market conditions. With its current yield, investors could potentially earn $93,200 a year in passive income from a $1 million investment in ASG. Furthermore, the fund is currently trading at a significant discount to its net asset value, making it an appealing investment opportunity.
ASG is just one example of a high-yielding closed-end fund that offers the possibility of high income and growth through a diversified portfolio of assets. The entire asset class of CEFs currently has an average yield of 8.2% and includes a range of assets such as stocks, bonds, real estate, and utilities. CEFs are regulated by FINRA and the SEC, providing investors with a level of security and reliability. With the availability of funds like ASG, investors can easily join the club of “elite” investors who have discovered the benefits of high-yielding CEFs.
In conclusion, the trend towards paying dividends in the tech sector presents a unique opportunity for investors to earn high income and capitalize on the growth potential of tech companies. Funds like ASG offer a way to achieve both income and growth by investing in a diversified portfolio of high-quality assets. With CEFs offering an average yield of 8.2%, investors have access to a range of investment opportunities that can help them build a strong passive income stream. By considering investments in high-yielding CEFs, investors can potentially join the club of “elite” investors who have found success in the high-income and high-growth world of CEFs.
