BNDW - BWG: Rising Foreign Allocation Should Benefit Investors

2024-06-21 14:10:28 ET

Summary

• BrandywineGLOBAL Global Income Opportunities Fund provides global diversification for income-focused investors.
• The BWG closed-end fund outperformed U.S. bond indices over the past several months, showing potential for higher returns.
• The BWG fund's leverage declined slightly over the past nine months, but it is still higher than peers, so it will probably be more volatile.
• The fund failed to cover its distribution for the second year in a row, but it appears to be improving in this area.
• The fund trades are discounted to net asset value right now.

The BrandywineGLOBAL - Global Income Opportunities Fund ( BWG ) is a closed-end fund, or CEF, that income-focused investors can employ as a method of achieving their goals. This fund is admittedly not nearly as well known as some of the other international funds that we have discussed in this column, and some of this may be due to the fund manager's relatively small size. Brandywine Global only has approximately $61 billion of assets under management, with most of this being in the fixed income space:

As the name suggests, the majority of the funds that this manager runs are global funds that primarily invest in securities from issuers outside the United States. As such, the BrandywineGLOBAL Global Income Opportunities Fund could be a good way to add some global diversification to your portfolio, which is becoming increasingly important for many American investors. This is important in both the stock and bond categories, but it has really shown its appeal in the bond market this year. As we can see here, American investment-grade bonds have underperformed the rest of the world year-to-date:

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