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25 Undervalued CEFs for High Yields in 2025
Undervalued closed-end funds (CEFs) are a top choice for income investing CEFs in 2025, offering high yields up to 13.7% and CEF NAV discounts as deep as -15.9%. These 27 undervalued CEFs, like DoubleLine Income Solutions (DSL) and Cohen & Steers Infrastructure Fund (UTF), are among the best CEFs for income 2025, delivering income and capital appreciation potential. For more on income strategies, check our guide to high-yield investing. But beware—leverage and rate pressures loom!
Discover Top Undervalued CEFs NowWhy Invest in Undervalued CEFs in 2025?
Closed-end funds 2025 are actively managed funds trading on exchanges with fixed shares, often at CEF NAV discounts. This creates opportunities for high-yield CEFs. Key metrics include:
- Discount to NAV: Buying $1 of assets for less than $1 signals undervaluation. Hover for moreNAV is the fund’s asset value minus liabilities, divided by shares outstanding.
- Distribution Yield: Yields of 8%+ must be sustainable via net investment income, avoiding high return of capital.
- Portfolio Quality: Diversified assets (e.g., investment-grade bonds, blue-chip stocks) reduce risk.
- Leverage Risks: Leverage (20-40%) boosts high-yield CEFs but amplifies losses. Learn moreIndustry reports highlight leverage and rising rates as key risks for closed-end funds 2025.
Top 27 Undervalued CEFs for 2025
These 27 high-yield CEFs, trading at significant CEF NAV discounts, are among the best CEFs for income 2025, offering value and income across bonds, equities, and infrastructure, based on data as of August 6, 2025.
| CEF (Ticker) | Market Cap (MM) | Distribution Yield | Discount to NAV | Asset Type |
|---|---|---|---|---|
| AllianceBernstein Global High Income (AWF) | $961.5 | 6.90% | -6.50% | Corporate Bonds |
| BlackRock Debt Strategies Fund (DSU) | $522.7 | 11.04% | -8.20% | Corporate Loans |
| Cohen & Steers Infrastructure Fund (UTF) | $2,571.0 | 7.63% | -10.10% | Infrastructure Stocks |
| DoubleLine Income Solutions Fund (DSL) | $1,318.9 | 10.48% | -7.90% | High-Yield Bonds |
| Pimco Dynamic Income Opportunities (PDO) | $1,535.2 | 11.20% | -5.40% | Multi-Sector Bonds |
| Nuveen Real Estate Income Fund (JRS) | $226.5 | 9.50% | -9.10% | REITs |
| Nuveen Credit Strategies Income (JQC) | $755.3 | 12.90% | -9.90% | Floating-Rate Loans |
| Tortoise Sustainable & Social Impact (TEAF) | $169.6 | 10.00% | -15.90% | Energy/Infrastructure |
| ClearBridge Energy Midstream Opp. (EMO) | $876.0 | 8.50% | -11.70% | MLPs |
| Sprott Physical Gold Trust (PHYS) | $11,300.0 | 0.00% | -1.90% | Gold Bullion |
| BlackRock ESG Capital Allocation (ECAT) | $2,100.0 | 22.50% | -3.40% | ESG Equities/Bonds |
| BlackRock Multi-Sector Income (BIT) | $580.0 | 10.30% | 0.50% | Multi-Sector Bonds |
| Advent Convertible and Income (AVK) | $420.0 | 11.70% | -4.50% | Convertible Bonds |
| abrdn Healthcare Investors (HQH) | $960.0 | 15.20% | -9.00% | Healthcare Stocks |
| Eaton Vance Enhanced Equity Income (EOI) | $820.0 | 8.20% | -2.80% | Large-Cap Stocks |
| Nuveen Municipal Credit Income (NZF) | $2,400.0 | 7.30% | -6.80% | Municipal Bonds |
| FS Credit Opportunities (FSCO) | $1,250.0 | 10.70% | -5.00% | Private Credit |
| abrdn Global Infrastructure Income (ASGI) | $510.0 | 13.47% | -10.00% | Infrastructure |
| BNY Mellon High Yield Strategies (DHF) | $200.0 | 8.50% | -7.20% | High-Yield Bonds |
| PIMCO Dynamic Income Fund (PDI) | $4,800.0 | 13.70% | -4.50% | Multi-Sector Bonds |
| Eaton Vance Municipal Income Trust (EVN) | $412.9 | 7.80% | -8.10% | Municipal Bonds |
| Western Asset High Income II (HIX) | $310.0 | 9.20% | -6.90% | High-Yield Bonds |
| Cohen & Steers REIT & Preferred Income (RNP) | $1,100.0 | 8.90% | -8.50% | REITs/Preferred Stocks |
| PIMCO Corporate & Income Opportunity (PTY) | $2,200.0 | 9.80% | -3.20% | Corporate Bonds |
| BlackRock Corporate High Yield (HYT) | $1,400.0 | 8.60% | -7.80% | High-Yield Bonds |
| Nuveen Preferred & Income Securities (JPS) | $1,050.0 | 8.40% | -6.30% | Preferred Stocks |
| DoubleLine Yield Opportunities (DLY) | $800.0 | 8.50% | -8.70% | High-Yield Bonds |
Deep Dive into High-Yield CEFs
Market Alert: High-yield CEFs averaged +6.14% YTD returns in Q2 2025, but 30% leverage amplifies volatility. CEF NAV discounts (average -8.7%) and yields (8.7%) make these the best CEFs for income 2025, especially in bonds and infrastructure.
AllianceBernstein Global High Income (AWF): High-Yield Value
This high-yield CEF offers a 6.90% yield and -6.50% NAV discount. With 1,218 corporate bond holdings, AWF is a top pick for income investing CEFs, balancing diversification and income.
BlackRock Debt Strategies Fund (DSU): High-Yield Value
DSU’s 11.04% yield and -8.20% NAV discount make it an undervalued CEF. Its asset-secured corporate loans and $522.7M market cap suit income investing CEFs, despite 38% leverage.
Cohen & Steers Infrastructure Fund (UTF): High-Yield Value
UTF’s 7.63% yield and -10.10% NAV discount target infrastructure stocks, making it one of the best CEFs for income 2025. Its $2.57B market cap and 252 holdings ensure stability.
DoubleLine Income Solutions Fund (DSL): High-Yield Value
Managed by Jeffrey Gundlach, this high-yield CEF delivers a 10.48% yield and -7.90% NAV discount. Its below-investment-grade bonds make it a top undervalued CEF for 2025.
Pimco Dynamic Income Opportunities (PDO): High-Yield Value
PDO’s 11.20% yield and -5.40% NAV discount are compelling for closed-end funds 2025. Its $1.54B market cap and non-agency mortgages boost income, though 30% leverage adds risk.
Nuveen Real Estate Income Fund (JRS): High-Yield Value
This high-yield CEF offers a 9.50% yield and -9.10% NAV discount. Its REIT focus (e.g., Prologis) benefits from real estate recovery, ideal for income investing CEFs.
Nuveen Credit Strategies Income (JQC): High-Yield Value
JQC’s 12.90% yield and -9.90% NAV discount stand out among closed-end funds 2025. Its 70% first-lien loans reduce risk, but 30% leverage adds volatility.
Tortoise Sustainable & Social Impact (TEAF): High-Yield Value
TEAF’s -15.90% NAV discount and 10.00% yield are enticing for undervalued CEFs. Its energy/infrastructure focus and 2031 liquidation suit patient investors.
ClearBridge Energy Midstream Opp. (EMO): High-Yield Value
EMO’s 8.50% yield and -11.70% NAV discount target MLPs, making it a top pick for income investing CEFs. Its $876M market cap balances risk and reward.
FS Credit Opportunities (FSCO): High-Yield Value
This high-yield CEF offers a 10.70% yield and -5.00% NAV discount in private credit. Its $1.25B market cap makes it an undervalued CEF for 2025.
abrdn Healthcare Investors (HQH): High-Yield Value
HQH’s 15.20% yield and -9.00% NAV discount target healthcare stocks, a niche pick for closed-end funds 2025. Its $960M market cap offers growth potential.
Advent Convertible and Income (AVK): High-Yield Value
AVK’s 11.70% yield and -4.50% NAV discount focus on convertible bonds, balancing risk and reward for the best CEFs for income 2025.
Market Outlook: Challenges and Opportunities
2025 Outlook: Undervalued CEFs averaged +6.14% YTD returns in Q2 2025, but 30% leverage and rising rates pose risks. CEF NAV discounts and high yields (8.7% average) offer bargains for income investing CEFs.
Key risks include:
- Leverage: 30% average leverage amplifies losses, impacting high-yield CEFs like JQC.
- Rate Sensitivity: Declining rates may boost bond prices but compress yields for closed-end funds 2025.
- Return of Capital: High distributions (e.g., ECAT’s 22.5%) may include unsustainable return of capital.
- Liquidity: Smaller CEFs (e.g., TEAF’s $169.6M) face wider bid-ask spreads.
Opportunities: Deep CEF NAV discounts (e.g., TEAF’s -15.90%) offer upside. Infrastructure (UTF, ASGI) and municipal bonds (NZF, EVN) provide stable cash flows for income investing CEFs.
Investment Strategies for High-Yield CEFs in 2025
- Target Deep Discounts: Seek undervalued CEFs with NAV discounts above -8.7%, like TEAF (-15.90%) or EMO (-11.70%), but verify distribution sustainability.
- Check Distributions: Review financial filings for return of capital, avoiding CEFs with high destructive return of capital (above 20%).
- Diversify Across Assets: Mix bond (DSL, PDO), equity (UTF, EOI), and alternative (PHYS) CEFs to balance risk for the best CEFs for income 2025.
- Focus on Quality: Prioritize low-leverage CEFs (below 25%, e.g., ECAT) and diversified portfolios (e.g., AWF’s 1,218 holdings).
- Monitor Market Trends: Track rate changes and sector performance, favoring infrastructure and municipal bonds for closed-end funds 2025.
FAQ: Undervalued CEFs in 2025
What Are Closed-End Funds (CEFs)?
Closed-end funds 2025 are actively managed investment funds traded on exchanges with fixed shares, often trading at CEF NAV discounts or premiums, ideal for income investing CEFs.
How to Evaluate CEF NAV Discounts?
Compare a CEF’s market price to its NAV. A discount (e.g., -10%) means buying assets below their value, offering gains as discounts narrow for undervalued CEFs.
Why Invest in High-Yield CEFs in 2025?
High-yield CEFs provide income (8.7% average yield) and deep CEF NAV discounts (up to -15.9%), making them the best CEFs for income 2025 in a volatile market.
Final Thoughts
Undervalued CEFs like TEAF, JQC, FSCO, DSL, and PDO are among the best CEFs for income 2025, offering high yields and deep CEF NAV discounts. Leverage and rate pressures demand caution, but quality high-yield CEFs with diversified portfolios can deliver outsized returns. For broader income strategies, explore our guide to high-yield investing. Research diligently to capture these income investing CEFs!
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before investing. Data is current as of August 10, 2025, and subject to change.
