EAD - EAD: Amortizing Junk Bond Fund Look Elsewhere For High-Yield
2024-06-26 08:52:28 ET
Summary
- Allspring Income Opportunities Fund is a junk-bond focused CEF with a 9.1% yield.
- However, the EAD fund has historically delivered only modest returns with above-average volatilities, resulting in poor risk-adjusted returns compared to peers.
- Investors seeking junk bond exposure should consider alternatives like the PGIM High Yield Bond Fund, the BlackRock Limited Duration Income Fund, or the Credit Suisse High Yield Bond Fund.
I came across the Allspring Income Opportunities Fund ( EAD ) while screening for high-yielding income funds.
Although the EAD fund pays an attractive 9.1% distribution yield, the fund does not fully earn its distribution. Instead, it utilizes the return of capital to fund its earnings shortfall. This leads to long-term NAV erosion and income declines....
EAD: Amortizing Junk Bond Fund, Look Elsewhere For High-Yield