GDO - GDO: Nice Yield But There Are Better Global Fixed-Income Funds Available

2024-05-19 11:18:39 ET

Summary

• The Western Asset Global Corporate Defined Opportunity Fund offers income-focused investors a high level of income from fixed-income securities.
• The fund has a current yield of 9.94%, which compares well to its peers.
• The fund's recent performance has been poor, and it has underperformed its peers significantly over the past three years.
• The fund is not as well diversified as some of its peers, which is something that is increasingly important given fiscal realities in the United States.
• The fund's future is somewhat up in the air as it attempts to convert to a perpetual fund.

The Western Asset Global Corporate Defined Opportunity Fund ( GDO ) is a closed-end fund that income-focused investors can employ as a method of achieving their goals of receiving a high level of income from the assets in their portfolios. As is the case with many income-focused funds, this one invests in fixed-income securities, so it does require that investors sacrifice some of the upside potential that would be achievable by investing in common equities. However, there could be some reasons to accept that with this fund, especially since it is quite possible that anyone purchasing the shares at today's price could achieve a respectable capital gain by the end of this year. This comes from the fact that this is a term closed-end fund that is scheduled to liquidate around the end of this year. We will discuss this in more detail later in this article.

As of the time of writing, the Western Asset Global Corporate Defined Opportunity Fund has a 9.94% yield. This compares reasonably well to many of the fund's peers:

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