JNK - HYI: Term CEF Lacking A Matched Collateral Base

2024-06-14 09:23:21 ET

Summary

• Western Asset High Yield Defined Opportunity Fund is a fixed-income CEF with a term maturity date of September 30, 2025.
• The fund's holdings do not match the maturity profile, leading to significant market risk as it approaches liquidation.
• Performance of HYI is in line with ETF peers, but with higher fees and risks, investors are advised to switch to other options.
• The CEF charges 95 bps versus just 40 bps for JNK.

Thesis

The Western Asset High Yield Defined Opportunity Fund ( HYI ) is a fixed-income CEF. What sets this fund apart is its term maturity date:

Provides a non-leveraged high-yield corporate fixed-income portfolio with a limited term structure that will liquidate on or about September 30, 2025

For further details see: