Many notable income stocks are trading at a premium become of investors’ huge appetite for yield, but you can still find closed-end funds (CEF) with high dividends that are trading at a discount to net asset values (NAV).

CEFs are actively traded funds that can be priced differently from the value of their net assets. When a CEF trades below its current value of assets, it is trading at a discount.  For example, when a CEF is trading at a 10 percent discount to NAV, you are buying $1.00 of assets for $0.90. If that CEF eventually trades back up to its NAV, the investor has made a 10 percent return on price.

The majority of CEFs were designed to be income-producing funds, allowing investors to earn income by investing in a bundle of securities from different asset classes.

We especially like CEFs that pay monthly dividends. These CEFs produce a monthly check each and every month, so investors can easily determine what and when they will be paid. Investors can add several CEFs to their portfolio to create a steady stream of monthly dividend checks.

Here are three CEFs trading at a discount to NAV that pay high distribution yields on a monthly basis:

The Calamos Strategic Total Return fund (NASDAQ: CSQ) seeks current income and capital appreciation through investment in common and preferred equity securities. Calamos is trading at $9.68, a 5.5 percent discount to NAV.

Calamos is showing momentum, rising 4.4 percent during the last 4 weeks and up 17.5 percent year to date. Calamos made $0.85 per share in net income and paid $0.37 in dividends, according to its most recent SEC filing (6 months ending 4/30/2012). This shows an excess income of $0.48 for future distributions, indicating that Calamos is financially strong and can sustain distributions into the future.

Calamos increased its monthly distribution 33 percent in February 2012, from $0.0525 to $0.07, and boasts a current dividend yield of 8.56 percent.

The Eaton Vance Tax Advantaged Dividend Fund (NYSE: EVT) maintains a robust distribution policy that includes qualified dividends (taxed at 15 percent instead of an investor’s ordinary income tax rate). Historically, all of its distributions have qualified for preferential tax treatment. Eaton Vance is trading at $16.20, a 9.75 percent discount to its NAV. It’s up 2.96 percent during the last 4 weeks and 12 percent year to date.

Eaton Vance is financially strong, with $1.40 per share in excess income (6 months ending 2/29/2012). It pays monthly distributions of $0.1075 per share for an annual dividend yield of 7.89 percent.

The Franklin Universal Fund (NYSE: FT) maintains a highly diversified portfolio of income investments. Franklin Universal seeks high income with capital preservation through investment in debt, equity, precious metals and natural resources securities.

Franklin Universal has 66 percent of investments in corporate bonds, 30 percent in common and preferred stocks in the utility sector and the rest in other assets. It’s trading at $7.51, a slight discount to NAV.

Franklin Universal has been up 4.7 percent in just the last month and it’s financially strong, with $0.48 per share in excess income (6 months ending 2/29/2012). The fund pays monthly distributions of $0.038 per share for an annual dividend yield of 6.15 percent.

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Greg Pugh, an income-investing expert, publishes a newsletter called Investing for Monthly Income.