This CEF offers 6.4% dividends by investing in regional banks benefiting from private credit trends.

The John Hancock Financial Opportunities Fund (BTO), a closed-end fund focused on regional banks, is capitalizing on private credit market concerns to offer a 6.4% dividend yield. Despite recent private credit worries, BTO’s portfolio has outperformed the S&P 500 in net asset value over three years, driven by regional banks that outsource lending risk to private credit funds. This strategy reduces risk and supports dividend growth, with BTO increasing payouts by 76% over the past decade. Investors see this as a strong income opportunity amid market volatility, with potential for further gains if the fund’s market price discount widens.