AWF: Risks Are Increasing, But Probably Worth Keeping The Fund

2025-05-04 11:27:11 ET

Summary

• The AllianceBernstein Global High Income Fund offers a 7.41% yield, higher than most fixed-income indices, making it attractive for income-seeking investors.
• The fund has a good country diversification, but it hedges away foreign currency exposure, reducing potential gains from a declining U.S. dollar.
• The fund's heavy investment in junk bonds makes it vulnerable to rising defaults if a U.S. recession occurs, increasing its risk profile.
• It is uncertain whether or not a recession will actually occur, as the decline in U.S. GDP during the first quarter does not necessarily suggest a fall in business activity.
• Currently trading at a 4.07% discount on NAV, the fund is slightly more expensive than its three-year average but reasonably priced against peers.

The AllianceBernstein Global High Income Fund ( AWF ) is a closed-end fund that investors may purchase as a method of achieving a very high level of income from the assets that they already possess. The fund does a reasonably good job of providing a higher level of income than most fixed-income indices, as it boasts a 7.41% yield at the current share price. This is higher than any of the exchange-traded index funds that investors frequently purchase to gain exposure to bonds as an asset class:

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