- The high-yield CEF sector has done well though not as well as other sectors in terms of discount returns in the last month (+1.3%).
- The sector as a whole is near its long-term fair value with a discount of -5%. But with spreads near the pre-COVID tightest levels, there isn't much upside for NAVs.
- When there's not much upside for NAVs and discounts are relatively tight, it may make sense for those risk averse or more tactical to make swaps.
- Here we list some clear sells, marginal sells, and on watch to sell funds along with the funds we like best to swap into.
- Another option would be to look at a high-yield bond mutual fund to hide out until discounts blow out.
For further details see:
CEF Analysis: High-Yield Sector Update