HYT - HYB: Attractive Valuation And Providing Monthly Income
2024-03-26 00:26:22 ET
Summary
- New America High Income Fund provides diversified high-yield bond exposure and is trading at an attractive discount.
- Although the fund's performance has been mostly flat since our last update, it has outperformed its non-leveraged, passively managed HYT peer over the long term.
- HYB pays a monthly distribution with strong distribution coverage as rates stabilize; if rates are cut, we could even see a possible increase.
Written by Nick Ackerman, co-produced by Stanford Chemist.
New America High Income Fund ( HYB ) provides investors with a diversified basket of high-yield income instruments, primarily high-yield bonds. The fund is leveraged, and that was a headwind for the fund when the Fed was aggressively raising interest rates. As their borrowing costs rose for the fund's borrowings, the income left for investors was reduced. The fund holds some senior loan exposure that provides floating rate exposure for the fund's underlying holdings, but it wasn't enough to offset the material decline....
HYB: Attractive Valuation And Providing Monthly Income