we’ve got a sweet opportunity to grab a 14 dividend sitting in front of us and we can thank the ongoing sale on bonds for this deal this doubledigit payer—which has held that huge payout steady for years—holds junk bonds or corporate debt that falls below the investmentgrade line isn’t there more risk here sure but we’re wellcompensated by the big yields junk bonds pay heck even the yield on the benchmark spdr bloomberg high yield bond etf jnk is a healthy 58 now but jnk really is for novice investors when we go with cefs like the one we’ll delve into in a moment we can boost our payout by more than double to 14—and get paid monthly plus we can get this outsized payout while cutting our risk with the pummeling corporate bonds took last year you can be forgiven if you want to avoid the space entirely but look closer at the 2022 results for bonds—shown by jnk in blue below—as well as for nasdaq benchmark invesco qqq trust qqq in orange and the spdr sp 500 etf trust spy in purple while everything fell sharply in 2022 junk bonds fell much less and actually avoided the bear market technically defined as a 20 drop from the most recent high the reason for junk bonds staying afloat for longer is that they provide cash flow to investors the regular interest payments from bond issuers midsized and large us companies in the case of jnk offset the panic you get in shortterm selloffs that makes them a good alternative in uncertain markets and with corporates still down about 15 from their recent high we have a nice window in front of us here but as mentioned jnk is not our best play instead we’re going to go with the brookfield real assets income fund ra a 142yielding junkbond cef with an incredible history as you can see below ra in blue below not only beat bonds in orange but also the sp 500 in purple over the last five years with dividends included sure the sp 500’s 513 return is close to what ra delivered but what’s really important here is that the sp 500’s sub2 income stream is a fraction of ra’s dividend yield this means that over the last three years—one of the most volatile periods in stockmarket history—ra holders got essentially all of their return in safe dividend cash ra maintains that income stream by collecting income from its bonds then passing it to investors in the form of monthly dividends ra’s diversification is both its strength and its defense against uncertain markets with half of its assets in bonds and debts connected to real estate the fund’s income stream is backed by physical properties being rented out and since ra uses the bond market instead of investing in real estate directly it’s not exposed to rising rates in the same way the mortgage market is that has helped the firm maintain payouts at the same level since its inception at the end of 2016 in other words ra shareholders have been getting a yield of 10 or higher for years even though many socalled experts say that’s impossible except of course it isn’t ra has been cleverly rotating its portfolio as rates rise so it sells older bonds that yield less since they were issued when rates were low and buys new bonds and other kinds of debt that pay higher rates of interest that’s made ra’s income stream more secure not less one more thing as i write this ra trades at a 10 premium to net asset value nav or the value of its portfolio even though we don’t like to pay premiums for cefs the key thing to pay attention to here is the current premium in relation to historical trends and with ra trading at around a 10 premium on average over the last five years this price is acceptable in light of the overselling of corporate bonds in the last 16 months ra’s high yield and the team of experts behind it brookfield is a real estate juggernaut with 800 billion in assets and more than a century of experience finally there are plenty of other junkbond cefs out there so ra shareholders can hold it for years then when the time comes swap their highyielding shares for another highyielding cef trading at a lower premium or ideally a discount rinse and repeat michael foster is the lead research analyst for contrarian outlook for more great income ideas click here for our latest report “indestructible income 5 bargain funds with steady 104 dividends”