ARDC Stock Recent News

Key Decision Factors For CEF Allocation In Today's Market

2023 year-end review of our 8% Income Portfolio. This high-income portfolio earned over $29,000 in distributions amounting to over 14% yield-on-cost basis and roughly 8.6% on average portfolio value. We will provide updates on trades during the year, dividends collected, and overall performance. As usual, we will compare the performance with a traditional 60:40 stock/bond portfolio.

We review CEF market valuation and performance through the second week of January and highlight recent market action. Most CEF sectors were up on the week, with CMBS delivering the best return. Discounts are tightening across all but one sector. CEF sector designation is not a precise endeavor, creating potential pitfalls for investors.

For income investors, closed-end funds remain an attractive investment class that covers a variety of asset classes and promises high distributions and reasonable total returns. Closed-end funds, or CEFs, are generally characterized by higher volatility and deeper drawdowns than the broader market. For these reasons, they are not suited for everyone. In this monthly series, we highlight five CEFs with solid track records that pay high distributions and offer "excess" discounts. We try to separate the wheat from the chaff using our filtering process to select just five CEFs every month from around 500 closed-end funds.

Ares Dynamic Credit Allocation Fund is a flexible, diversified fixed-income fund managed by Ares Management. The fund has strong distribution coverage and has increased its distribution several times, with the potential for another increase. ARDC is trading at a historically attractive discount, making it an opportunity in the current environment.

Ares Dynamic Credit Allocation Fund, Inc. offers a competitive 11.02% distribution yield, appealing to income-focused investors. The ARDC closed-end fund's performance has been stable, outperforming the Bloomberg U.S. Aggregate Bond Index over the past three months. The fund's allocation to both fixed-rate bonds and floating-rate loans allows it to capitalize on changing interest rates.

Ares Dynamic Credit Allocation Fund has increased its distribution for the fourth time in 18 months, reaching its highest distribution since inception. The ARDC closed-end fund's net income has risen to a record high since 2020, driven by the rise in base rates and a re-leveraging of the fund. ARDC has a portfolio split of 60/40 between floating-rate and fixed-rate corporate assets, with overweight allocations in the Energy, Leisure, and Technology sectors.

Rose's Income Garden consists of 5 high yield monthly payers from the energy, utility, and finance sectors. The top monthly payer in RIG is PennantPark Floating Rate Capital Ltd. with a dividend yield of 11.7%. Other high yield monthly payers in RIG include SLR Investment Corp., Ares Dynamic Credit Allocation Fund, Neuberger Berman Energy Infrastructure Income Fund, and DNP Select Income Fund.

The high level of inflation in the US is making it difficult for Americans to maintain their standard of living. Ares Dynamic Credit Allocation Fund, Inc. offers a high level of income for investors through its portfolio of debt securities. The fund's use of leverage and allocation to floating-rate securities helps to boost its effective yield and protect against rising interest rates.

We review CEF market valuation and performance through the fourth week of May and highlight recent market action. CEFs had another down week - the fourth in a row - as rising Treasury yields and weak sentiment keep the market under pressure. Loan CEFs discounts have been trading relatively wide despite strong income gains and resilient NAV performance. We take a look at possible reasons why.