JNK - FSD: This CEF's Short Treasury Position Appears To Be Working

2024-06-06 18:15:48 ET

Summary

• First Trust High Inc Long/Short Fund has a higher yield than most other closed-end funds investing in high-yield bonds.
• The FSD closed-end fund has outperformed the Bloomberg U.S. Aggregate Bond Index and the Bloomberg High Yield Very Liquid Index over the past several months.
• The fund's leverage is slightly higher than its peers, but it is not a cause for concern.
• The fund has a short position in medium-term Treasuries, which appears to have been profitable so far. This is an extra return in addition to what it got from the long bond holdings.
• The fund's distribution appears to be okay, but it has struggled over the past two years and there are still risks, so investors should be cautious.

The First Trust High Inc Long/Short Fund ( FSD ) is a closed-end fund, or CEF, that income-focused investors can purchase as a method of achieving their goals of earning a high level of current income from the assets in their portfolios. The fund does fairly well at this task, as its 10.45% current yield is higher than most other funds in its class. We can see that here:

For further details see: