If I Had to Pick 3 (For Income) — 1 Year Later

I currently hold 37 income investments, yielding just over 11%. But what if I had to sell 34 of them and live off the income from only three?

Two of my choices have changed since last year, and one is currently on sale.

I'm not simply looking for the highest yields. Each fund needs to provide attractive income, offer a different source of returns, and have a strategy I believe can survive difficult markets.

GPIQ: Growth and Income

My first choice is GPIQ, Goldman Sachs' NASDAQ 100 covered call ETF, yielding around 10%.

Last year, I picked QQQI, which still offers a higher yield of approximately 14%. However, GPIQ has delivered stronger total returns, with most of its advantage developing over the past year.

GPIQ has slightly outperformed the NASDAQ 100 over the past year, despite paying substantially higher distributions.

That doesn't mean GPIQ will always outperform the index. Covered call performance depends on market conditions and how effectively Goldman manages its options exposure.

GPIQ also offers attractive tax treatment. In 2025, approximately 95.6% of distributions were classified as return of capital, which can defer taxes by reducing an investor's cost basis.

PFFA: The Income Fund on Sale

My second choice is PFFA, replacing last year's pick, PBDC.

Both yield approximately 11%, but PFFA offers more consistent distributions, potentially more favorable tax treatment, and exposure across additional economic sectors.

PFFA holds preferred shares, which are hybrids between stocks and bonds. Their distributions follow predetermined formulas, making income generally more predictable than common stock dividends.

PFFA's yield has climbed to approximately 11% as its share price declined, creating a potentially attractive entry point.

The recent weakness reflects concerns about interest rates and credit conditions. Its leverage also increases risk, but active management creates opportunities to purchase discounted preferred securities.

For a long-term investor, a price below $20 looks attractive to me.

PFFA's holdings span financials, real estate, industrials, communications, utilities, and other sectors.

CEFS: Diversification in One Fund

My third choice remains CEFS, one of my favorite lazy income investments.

CEFS holds approximately 92 closed-end funds, providing exposure to thousands of underlying investments across multiple asset classes.

CEFS provides exposure to private technology, precious metals, microcaps, corporate bonds, international stocks, and infrastructure.

What makes CEFS particularly interesting is Saba Capital's strategy of purchasing discounted closed-end funds and actively working to unlock shareholder value.

CEFS recently adopted a 12%-of-NAV annual distribution policy. That means more cash for shareholders, although it doesn't guarantee higher total returns or sustainable NAV growth.

My Take

If I could hold only three income funds, GPIQ, PFFA, and CEFS would provide a combination of growth-linked income, preferred-share distributions, and broad diversification.

They aren't risk-free, and I wouldn't describe them as a completely hands-off retirement portfolio.

That's why I actually hold 37 investments, including BDCs, international equities, precious metals, midstreams, and real estate.

But if I had to simplify dramatically, these three would be my starting point. Each serves a different purpose, and together they offer the income and diversification I value most.

To learn more, click here for the full Review.

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