2024-03-14 05:44:11 ET
Summary
- The BlackRock Debt Strategies Fund offers a high level of income with a 10.64% yield, in line with other funds investing in fixed-rate and floating-rate debt securities.
- The fund's allocation to floating-rate securities and its ability to navigate interest rate movements make it attractive in a rising rate environment.
- The fund's distribution history has been variable, but it does appear that it can sustain it as long as interest rates remain at today's levels or increase.
- Recent economic data weakens the case for interest-rate cuts and provides support for the thesis that the fund's current asset allocation is a good one.
- The fund's shares currently appear to be too expensive. If they swing to a discount, the fund is deserving of a "Buy" rating.
The BlackRock Debt Strategies Fund ( DSU ) is a closed-end fund that can be purchased by investors who are seeking to earn a very high level of income from the assets in their portfolios. The fund certainly does quite well in this respect, as it boasts a 10.64% yield at the current share price, which is easily in line with other funds that invest in a combination of fixed-rate and floating-rate debt securities. For example, here are the yields currently possessed by some of this fund's peers:
Fund | Current Yield |
BlackRock Debt Strategies Fund | 10.64% |
Apollo Tactical Income Fund ( AIF ) | 11.08% |
Ares Dynamic Credit Allocation Fund ( ARDC ) | 10.08% |
RiverNorth/DoubleLine Strategic Opportunity Fund ( OPP ) | 14.29% |
PIMCO Income Strategy Fund ( PFL ) | 11.55% |
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For further details see:
DSU: This Dynamic Credit Fund Is Positioned For 'Higher For Longer'