HYG - GOF: Why I'm Downgrading This 16.2% Distribution Rate To A Sell
2024-06-14 03:17:55 ET
Summary
- Guggenheim Strategic Opportunities Fund trades at a 23.86% premium to NAV, with a distribution rate of 16.2% and total leverage ratio of 22.6%.
- The fund has a history of trading at a premium and strong performance, outperforming high-yield and aggregate bond ETFs.
- The fund's portfolio includes various fixed-income instruments, bank loans, high-yield bonds, and preferred securities, but may face downside risk in riskier credit scenarios.
The Guggenheim Strategic Opportunities Fund ( GOF ), is a $1.9 billion under-management, closed-end fixed-income fund, it trades 23.86% above its net asset value. It has a current distribution rate of no less than 16.2% with a total leverage ratio of 22.6%. Its expense ratio is 2.96%, but this includes interest costs. I don't like buying closed-end funds at a premium to their net asset values, and this is no exception. To be fair, I've been wrong about that with this one. In my last article covering GOF I rated it a hold, and it generated a ~14.6% total return and even beat the S&P 500 ( SPY )....
GOF: Why I'm Downgrading This 16.2% Distribution Rate To A Sell