GUG - GUG: An Attractive Discount For A Multi-Sector Fixed-Income Focused Fund
2024-05-21 14:55:07 ET
Summary
- Guggenheim Active Allocation Fund trades at a wide discount, making it an interesting choice for a closed-end fund looking for multi-sector fixed-income exposure.
- The GUG fund's portfolio is focused on lower-rated debt investments, but with significant diversification to help reduce risk.
- GUG's distribution yield is attractive at 9.65%, but its net investment income coverage is lacking, which means they will require gains to help cover its distribution.
Written by Nick Ackerman, co-produced by Stanford Chemist.
Since the last time we gave the Guggenheim Active Allocation Fund ( GUG ) a look, the discount has narrowed, but it still trades at a wide discount, which makes it an interesting choice. In particular, as its sister fund, Guggenheim Strategic Opportunities Fund ( GOF ), once again starts looking a bit richer in the premium department, it could be seen as a more compelling choice.
GUG Basics
- 1-Year Z-score: 1.63
- Discount: -10.60%
- Distribution Yield: 9.65%
- Expense Ratio: 1.7%
- Leverage: 22.35%
- Managed Assets: $699.5 million
- Structure: Term (anticipated liquidation date of November 22, 2033).