KIO - DHY: Narrow Credit Spreads Could Pose A Risk To The Fund's Assets
2024-06-11 11:23:25 ET
Summary
- The Credit Suisse High Yield Bond Fund offers a 9.07% distribution yield, comparable to other closed-end junk bond funds.
- The fund has outperformed both the Bloomberg U.S. Aggregate Bond Index and the Bloomberg High Yield Very Liquid Index over the past six months.
- The fund's leverage ratio is below one-third of assets, indicating a reasonable balance between risk and potential returns.
- Credit spreads are very tight right now, but they could widen if economic data continues to show weakness. That could push down the fund's share price.
- The fund is fully covering its distributions and the shares currently trade at a discount on net asset value.
The Credit Suisse High Yield Bond Fund ( DHY ) is a closed-end fund that income-focused investors can employ as a method of achieving their goal of generating a high level of current income from the assets that they already possess. The fund manages to do a fairly good job of that, as it currently boasts a 9.07% distribution yield. This is in line with the yields possessed by other closed-end junk bond funds:
| Fund Name |
| Morningstar Classification |
| Current Yield |
| Credit Suisse High Yield Bond Fund |
| Fixed Income-Taxable-High Yield |
| 9.07% |
| Allspring Income Opportunities Fund ( EAD ) |
| Fixed Income-Taxable-High Yield |
| 9.38% |
| BNY Mellon High Yield Strategies Fund ( DHF ) |
| Fixed Income-Taxable-High Yield |
| 8.59% |
| BlackRock Corporate High Yield Fund ( HYT ) |
| Fixed Income-Taxable-High Yield |
| 9.61% |
| KKR Income Opportunities Fund ( KIO ) |
| Fixed Income-Taxable-High Yield |
| 10.74% |
| Pioneer High Income Fund ( PHT ) |
| Fixed Income-Taxable-High Yield |
| 8.96% |