HYI Stock Recent News

Volatility in the closed-end fund, or CEF, market has recently increased, while tight discounts create a point of vulnerability for the market. We discuss various strategies investors can use to make their CEF portfolios more resilient to take advantage of future draw-downs. These strategies include focusing on likely CEF distribution changes, seeking funds with wide discounts, considering term CEFs, and riding sidecar with CEF activists.

With market valuations back to expensive levels, we are looking at a number of alpha strategies in the CEF space. These include interval and term funds, relative value as well as leaning against investor flows. We highlight a number of attractive funds such as RSF, PFO, BGH and others.

Western Asset High Yield Defined Opportunity Fund is a term-structured, non-leveraged high-yield fund that is expected to liquidate in 2025. As the termination date approaches, the HYI fund's discount becomes more important in potentially generating alpha. HYI has a distribution yield of 9.96% and offers diversified exposure with meaningful allocations outside the U.S.

Western Asset High Yield Defined Opportunity Fund is a fixed-income CEF with a term maturity date of September 30, 2025. The fund's holdings do not match the maturity profile, leading to significant market risk as it approaches liquidation. Performance of HYI is in line with ETF peers, but with higher fees and risks, investors are advised to switch to other options.

Western Asset High Yield Defined Opportunity Fund is a closed-end fund scheduled to be liquidated in 18 months. The fund's current yield of 9.52% compares well to similar options in the market. HYI's performance has been disappointing, but investors purchasing it today should realize some gains upon liquidation unless interest rates do not fall at all.

The Western Asset High Income Fund II is undergoing a rights offering, which has pushed the fund to a deep discount.

The Western Asset High Yield Defined Opportunity Fund offers investors exposure to high-yield corporate debt. The fund provides a respectable yield with relatively strong distribution coverage despite using no borrowings. The fund's current discount is fairly attractive but has narrowed since our prior update.

Leveraged closed-end funds are facing headwinds of rising costs associated with leverage in a higher interest rate environment. The Western Asset High Yield Defined Opportunity Fund offers exposure to a high-yield bond portfolio with an attractive discount while being a term fund. HYI's income has been growing with rising yields, and the fund recently increased its distribution, making it a potentially attractive investment.

HYI is a fixed-income closed-end fund. What makes HYI stand out is its term structure, with the fund set to terminate on or about September 30, 2025.

HYI is a non-leveraged fund that operates in the high-yield space. During times of volatility and higher interest rates, no leverage can be a benefit.