Investing $60,000 in These 3 Funds Could Generate Annual Income of Over $6,500

Income investors could pay attention to the price fluctuations of the assets they own. But they don't have to. What really matters for them is that the dividends and distributions keep flowing steadily -- and the higher the yield, the better.

Where can you find great candidates to achieve these objectives? Investing $60,000 in these three closed-end funds (CEFs) could generate an annual income of over $6,500.

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1. BlackRock Debt Strategies Fund

The BlackRock Debt Strategies Fund (NYSE: DSU), which is managed by giant investment company BlackRock, boasts a lofty distribution rate of 12%. If you invested $20,000 (one-third of your initial $60,000) in this CEF, your annual income would total $2,400 at that rate.

This CEF invests primarily in secured and unsecured U.S. corporate loans. Its portfolio includes 1,253 holdings. None comprise more than 3% of total assets, with most holdings below 1%.

Why should income investors like the BlackRock Debt Strategies Fund (aside from its juicy yield)? For one thing, Morningstar gives it a five-star rating (the highest score possible) based on its risk-adjusted total return. The CEF pays a monthly distribution and is trading at a discount of more than 3% below its net asset value (NAV).

There are some downsides to the fund, though. It's exposed to some risk if companies default on their loans (although that risk is mitigated somewhat by its highly diversified portfolio). The BlackRock Debt Strategies Fund uses leverage, which increases its risk to sharp interest rate spikes. However, its leverage ratio of 15.43% isn't super high. The CEF also has a gross expense ratio of 2.33%. The good news on that front is that its distribution is net of expenses.

2. abrdn Healthcare Opportunities Fund

Aberdeen Investments' Abrdn Healthcare Opportunities Fund (NYSE: THQ) currently offers a distribution yield of 11.33%. Buying $20,000 worth of this CEF would generate $2,266 in annual income at that level.

As its name hints, this fund invests in the healthcare sector. It owns 110 holdings, including common stocks, preferred stocks, and debt of healthcare companies. The CEF's top holdings are Eli Lilly, UnitedHealth Group, AbbVie, Abbott Laboratories, and Merck stocks.

The Abrdn Healthcare Opportunities Fund pays its distributions monthly. The CEF is also available at a small discount right now, trading at 0.78% below its NAV. Since healthcare stocks often hold up relatively well in volatile markets, the fund could be an especially good pick in the current environment.

On the negative side, this fund uses more leverage than some investors will prefer, with its leverage ratio of 22%. It also has a high annual expense ratio of 3.1%.

3. BlackRock Enhanced Large Cap Core Fund

Investing in another CEF managed by BlackRock could also enable income investors to rake in money. The BlackRock Enhanced Large Cap Core Fund (NYSE: CII) pays a distribution yield of 9.28%. Buying $20,000 of this fund would give you $1,856 in annual income at that rate, bringing our total income for these three CEFs to $6,522.

This CEF owns 222 large-cap stocks, of which nearly 95% are based in the U.S. Its top holdings include Microsoft, Amazon, Meta Platforms, Visa, and Cardinal Health. The fund also sells call and put options to boost income and reduce portfolio volatility.

Morningstar gave the BlackRock Enhanced Large Cap Core Fund four out of five stars. Like the other two CEFs on our list, it pays distributions monthly. The fund's annual expense ratio of 0.93% is relatively low for CEFs. You can also buy the fund at a discount of roughly 7% below its NAV.

The main drawback to owning the BlackRock Enhanced Large Cap Core Fund is that its price can decline significantly at times (such as during the recent market sell-off). However, the fund's options strategy provides a cushion to some extent.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Speights has positions in AbbVie, Abrdn Healthcare Opportunities Fund, Amazon, BlackRock Debt Strategies Fund, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Amazon, Merck, Meta Platforms, Microsoft, and Visa. The Motley Fool recommends UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.