WDI - WDI: Fully Covered ~12% Yield
2024-05-05 22:29:34 ET
Summary
- Western Asset Diversified Income Fund continues to perform well and is nearing our 'Buy' discount target.
- WDI's distribution is fully covered by net investment income, but coverage may decrease with expected rate cuts in the future.
- WDI's portfolio is diversified with a focus on high-yield credit, collateralized loan obligations, commercial MBS, and bank loans.
Written by Nick Ackerman, co-produced by Stanford Chemist.
Western Asset Diversified Income Fund ( WDI ) continues to perform well and provide investors with a fully covered double-digit yield. The closed-end fund's discount had narrowed materially at the beginning of 2024 but has widened back out once again. It has been a bit shallower since our previous update last December. Overall, the current discount once again puts the fund back into our 'Buy' discount target.
Since our last update , that narrowing discount helped to 'boost' the overall total returns. This has put it at a level where it was competitive with the S&P 500 Index. Of course, that's not an appropriate benchmark for a multi-sector fixed-income fund, but it can give us a glimpse into how equities were performing during this period....
WDI: Fully Covered ~12% Yield