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Many investors oversimplify the investment process with respect to duration by thinking about the concept on a single spectrum. They also focus overly on today's yield rather than considering reinvestment risk as well as capital gains consequences. We discuss two of these investment process shortcomings and highlight a number of attractive holdings in the context of the current market environment.
Barings Global Short Duration High Yield Fund offers exposure to high-yield bonds and loans with a focus on short duration. BGH continues to trade at an attractive discount, with a well-covered distribution that's paid monthly to investors. Given the strong distribution coverage with a modest NAV rate, the fund could increase its distribution or pay a year-end special.
CHARLOTTE, N.C.--(BUSINESS WIRE)--The Barings Global Short Duration High Yield Fund (the “Fund”) (NYSE: BGH) announced its monthly dividend for June 2024 of $0.1056 per share, payable on July 1, 2024. Based on the Fund's May 31, 2024 share price of $14.19 per share, the dividend represents an annualized yield of 8.93% per share. Based on current projections through the payable date, the Fund expects that this dividend will be comprised of net investment income. In addition, the Fund announced e.
BGH: The Corinthia Corporate Raid Could Damage This Credit Fund, Buyer Beware
Barings Global Short Duration High Yield Fund offers a fully covered double-digit distribution yield and trades at a double-digit discount. The fund's focus on shorter durations has helped its performance compared to other fixed-income investments during the current rate environment. BGH's portfolio has a higher allocation to lower credit quality issuers, but its diversified exposure and discounted portfolio reflect some of the heightened credit risk.
Barings Global Short Duration High Yield Fund is a closed end fund focused on fixed income. The CEF invests in debentures and loans with a global mandate.
Only funds with yields over 6.5%, coverage higher than 85% and trading at under a +5% premium are considered. Top lists of discount, yield, DxY and DxYxZ are given.
The current high-yield corporate bond market landscape allows investors to achieve a similar level of yield for different levels of duration. This means that, unlike in typical market environments, investors who want to run a shorter-duration bond exposure aren't leaving any yield on the table.