Focusing on healthcare with an emphasis on biotech, HQH seeks long-term capital appreciation by investing in companies across the healthcare sector. 40% of the fund's $892 million in assets under management are invested in restricted securities of both public and private companies. This gives shareholders exposure to unlocked value, especially when private goes public. Averaging an 11.17% annual return over the last decade, HQH is an excellent, cutting-edge portfolio to complement Tekla's more conservative offering, Tekla Healthcare Opportunities Fund (NYSE: THQ). HQH shares trade at a roughly 4% discount to NAV at $23.88, and pay a 10.55% dividend yield.

Risks To Consider: Collectively, the biggest risks facing these three CEFs are rising rates and market perception. Due to the wide use of leverage amongst CEF managers, rate turbulence usually affects the group. Even funds not using leverage get punished in a downturn. That said, the actual effect of rising rates would not come into play as the funds don't employ leverage. It would stand to reason that their portfolios would recover more quickly.