ARDC: We're Back In This Multi-Sector Credit CEF

2025-04-18 04:00:41 ET

Summary

• Recent market volatility has made the Ares Dynamic Credit Allocation Fund more attractive, with a current yield of 10.6% and an 8.4% discount.
• ARDC's portfolio includes loans, corporate bonds, and CLO securities, with a focus on Energy and Technology sectors, and minimal CCC-rated securities.
• ARDC's use of fixed-rate preferreds for half its borrowings at 2.81% interest provides a significant yield advantage over other credit CEFs.
• Most recently, its discount has widened in absolute terms and relative to the sector.

Recent market volatility has opened up a number of new income opportunities. One of these is the Ares Dynamic Credit Allocation Fund ( ARDC ) - a multi-sector credit CEF. The fund has sold off sharply, and its discount opened up to a double-digit level before rallying slightly. The fund is down 18% from its 1-year peak; it trades at a current yield of 10.6% and an 8.4% discount....

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