A notable aspect of this year's stock market advance is how concentrated the gains have been in recent months.

This holds especially true for technology shares. The NASDAQ has posted a 33% gain since March 30. The tech-focused Vanguard Information Technology Index Fund (VGT) has climbed even higher at 48%.

Such rapid moves naturally spark questions. Is the labor market cooling? Are inflation and rates remaining elevated?

These concerns carry weight, yet stocks ultimately align with earnings and revenue trends over time, and both metrics show strong increases. Revenues rose 11.4% year over year in the first quarter.

Earnings for the S&P 500 jumped 27%, led by tech, communication services, industrials and consumer discretionary sectors.

These trends point to solid consumer spending, backed by gains in financials and industrials. Overall, market advances appear justified even if the pace feels brisk.

Still, not every stock or closed-end fund delivers gains. CEFs offering yields above 8% form the focus of my CEF Insider service.

Two stand out now: one appears undervalued while another carries a 24.1% yield that flags risk rather than reward.

This 24.1% Yield Serves as a Caution

I discussed Oxford Lane Capital Corp. (OXLC) in a May 21 piece. Its appeal can grow during strong rallies, yet major drawbacks remain.

The full review appears in that earlier article. Key issues include high fees and the impact of a dividend reduction. OXLC focuses on collateralized loan obligations backed by below-investment-grade borrowers.

Fees reach 15.7% of assets when including interest costs from leverage used on roughly 42% of holdings. These costs reduce net asset value and pressure long-term results. The dividend has dropped 41% over five years, with the share price declining as well.

24% Yield Hides Price Declines and Payout Cuts

Since its 2011 launch, OXLC has posted positive but lagging returns versus the S&P 500 and high-yield bond benchmarks.

That underperformance reinforces the sell case. In contrast, consider this stronger alternative.

This 8.3% Payout Benefits From AI Expansion and Broader Growth

The Liberty All-Star Growth Fund (ASG) stands out as a top equity CEF holding. It currently yields 8.3% and tilts toward tech while including names less tied to the recent surge, aiding diversification.

Top holdings include NVIDIA (NVDA), Apple (AAPL), Microsoft (MSFT) and Amazon.com (AMZN). Additional positions feature Monolithic Power Systems (MPWR) for data-center chips, plus non-tech names such as FirstService (FSV) and Ollie's Bargain Outlet Holdings (OLLI).

ASG has delivered a 34% total return since our May 2023 purchase. Its discount to net asset value has widened to around 12%, allowing purchase of the portfolio at roughly 88 cents on the dollar.

The fund links payouts to portfolio performance, supporting growth as earnings and sales rise.

4 Additional CEFs Offering 9.9% Average Yields With Attractive Discounts

CEFs often present bargains in rising markets due to limited attention. ASG illustrates this dynamic. My team has identified four more high-yield options viewed as timely buys.

Each holds surging portfolios yet trades at wide discounts. They yield 9.9% on average, with three paying monthly.

These opportunities merit attention before discounts narrow. Click here for details on these four income ideas plus a free Special Report with names, tickers and full portfolio reviews.

Further OXLC Research:

Warren Buffett Dividend Stocks
Dividend Growth Stocks: 25 Aristocrats
Future Dividend Aristocrats: Close Contenders

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.