- Asian credit has good potential as a way to diversify income sources.
- FAX holds a diverse portfolio of sovereign and corporate credits, most of which is investment grade.
- However, its history of overdistribution has led to eroding NAV.
- Additionally, the fund trades at a chronic discount, and management has refused to conduct aggressive stock buybacks.
- If the fund started an aggressive stock buyback (perhaps with activist involvement), it could make an interesting trade to hold until it trades closer to NAV. However, until then, I'll be avoiding this fund.
For further details see:
2 Reasons Why I Don't Own FAX