FAM - EHI: Increasing Domestic Exposure But Not All Bad For Those Seeking Diversification

2024-06-16 05:36:20 ET

Summary

• Western Asset Global High Income Fund offers high income potential with a global focus, providing international diversification in portfolios.
• The fund boasts an 11.77% yield, which is higher than most of its peers.
• Leverage ratio of 34.53% raises concerns, but the fund is currently covering its distribution and trades at a discount on NAV.
• The fund has increased its American allocation over the past few months. This might be an attempt to take advantage of the current "flight-to-safety" occurring in the bond market.
• The fund certainly appears worthy of being held right now.

The Western Asset Global High Income Fund ( EHI ) is a closed-end fund that can be employed by investors who are seeking to earn a very high level of income from the assets in their portfolios. As the name of the fund suggests, the Western Asset Global High Income Fund has a global focus, which can be advantageous during times in which interest rates in foreign countries are higher than they are in the United States. That is not the case today, though, as the United States has the highest benchmark rate of any developed country, but it is still lower than that possessed by most emerging markets. Another advantage that this fund has over that of many other income-focused closed-end funds is that it can help an investor achieve some international diversification in their portfolios. In various previous articles, I have discussed why this is important today. Fortunately, investors in this fund do not need to sacrifice yield to obtain these potentially advantageous features, as the Western Asset Global High Income Fund boasts an 11.77% yield at the current share price. As we can see here, this yield compares very well to that of the fund's peers:

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