HYG - DHF Vs. DHY: High Yield Plays At Attractive Discounts
2024-01-25 05:47:12 ET
Summary
- Credit Suisse High Yield Bond Fund and BNY Mellon High Yield Strategies Fund offer high monthly distributions and are trading at attractive discounts.
- Both funds utilize leverage to increase their potential returns and income-generation, but this comes with increased volatility and now higher borrowing costs.
- DHY has a stronger performance track record, but DHF looks like the better value today with strong distribution coverage as well.
Written by Nick Ackerman, co-produced by Stanford Chemist.
Credit Suisse High Yield Bond Fund ( DHY ) and BNY Mellon High Yield Strategies Fund ( DHF ) deliver high monthly distributions to income investors through leveraging up their below-investment grade portfolios (i.e., "high yield," as their names state.) Both of these funds also are trading at relatively attractive discounts.
They also both launched in 1998 and swiftly went from their launch price to low single-digit share prices as the dot-com bubble exploded. Today, they remain 'penny stocks' as the technical definition is a security trading below $5. However, these are both closed-end funds....
DHF Vs. DHY: High Yield Plays At Attractive Discounts