Tekla World Healthcare Fund (THW) Stock

abrdn World Healthcare Fund operates as a closed end fund that prioritizes income generation from its portfolio of healthcare investments. The current dividend yield sits at a high 11.7% and has never been reduced since the fund's inception. THW's weakness is the limited upside potential because of its closed end structure and the inclusion of a option strategy against underlying equities.

abrdn World Healthcare Fund (THW) offers diversified exposure to the healthcare sector with a high dividend yield of 10.7% paid out on a monthly basis. The fund's distribution coverage has raised concerns as it has been primarily funded by return of capital, leading to NAV decline. THW's option strategy has not significantly boosted income and has limited upside potential.

I previously recommended the THQ fund over the THW fund, as THQ's distribution was more sustainable. However, THQ has recently boosted its distribution to a 10.9% yield. This risks making it long-term unsustainable as well. I recommend investors buy low-cost passive ETFs and create their own 'high-yielding' funds by periodically selling a portion of their holdings.

Tekla World Healthcare Fund's portfolio is a blend of both domestic and international stocks. One of the key highlights of the THW closed-end fund is the global diversification of its portfolio. For investors looking at yield, I think it's a good fund to consider.

Dividend harvesting is a strategy that allows an investor to capture a company's dividend with the intention of selling the stock shortly after the stock goes ex-dividend.