The high-yield sector has proven to be relatively resilient during the drawdown episode earlier this year, despite a lack of direct Fed support. A big part of this resilience has to do with the fact that the sector is long-duration and so it benefited from the drop in interest rates which partially offset the sharp widening in credit spreads. However now that credit spreads have retraced about 80% of their widening, it makes sense for investors to dial down their exposure somewhat.
Our main takeaway is that closed-end funds remain attractive investments relative to open-end