MURGF - BRW: Severe Losses Might Be Due To Cat Bonds And Failure To Cover Distributions

2024-07-03 14:36:01 ET

Summary

• Saba Capital Income & Opportunities Fund offers a high current income with a 14.51% yield, outperforming peers.
• The BRW closed-end fund's poor recent performance appears to have been caused by exposure to catastrophe bonds, leading to a net asset value decrease.
• The Fund failed to cover distributions in recent periods, indicating a potential need for distribution reduction to avoid running out of money.
• The Fund appears to be positioned for high interest rates, and a sudden cut by the Fed in July could be another risk right now.
• The Fund is currently trading discounted to net asset value.

The Saba Capital Income & Opportunities Fund ( BRW ) is a closed-end fund, or CEF, that income-focused investors can purchase as a method of achieving their goals of earning a very high level of current income from the assets in their portfolios. The fund certainly does quite well at this task, as it currently boasts a whopping 14.51% yield based on the most recent closing price. This is among the highest yields available from any closed-end fund in any sector, which regular readers can probably see. It is certainly higher than the yield available from many of the fund’s peers:

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