AWF - AWF: Not Attractive Anymore After The Discount Narrowing (Rating Downgrade)

2024-05-13 16:55:39 ET

Summary

• AllianceBernstein Global High Income Fund is a closed-end fund focused on global high-yield bonds.
• The fund is focused on global non-investment grade names, with the highest exposure to U.S. credits.
• The name has outperformed since our 'Buy' rating in 2023.
• Credit spreads are at historic lows, reducing potential returns, and the discount to NAV has narrowed, reducing potential gains from this feature. Furthermore the current yield is not attractive compared to other options in the market.

Thesis

Six months ago, we started covering the AllianceBernstein Global High Income Fund ( AWF ), assigning it a 'Buy' rating at the time on the back of an attractive discount to NAV profile and high corporate spreads. The fund has outperformed, delivering a total return exceeding 10%:

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