Dividend-News

Weekly Review: High-Yield CEFs - PHT Has The Potential To Increase Its Price

Published Tue, 15 Jan 2019 07:33:45 -0500 on Seeking Alpha

Introduction
The opportunities in closed-end funds over the last few months caught the eye of many investors. Most of these products are designed to provide a steady stream of income, usually on a monthly or quarterly basis, as opposed to the biannual payments provided by individual bonds. And this feature continues to attract market participants even when the overall market looks unstable.
In spite of CEFs being mostly of interest to income investors, we have found our path to approach them as active traders and we are constantly monitoring them. As a testament to this, you will be kept up to date with Weekly Reviews such as the one below.
The Benchmark
Over the past year, we have not seen a strong performance by the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) on a weekly basis. Four solid green bars and a total increase of $1.50 in the price helped the main index to bounce from its bottom. What is going to happen now? I believe this is an important question which investors interested in the sector ask. No doubt, a significant recovery from the sector indicates returned trust in the credit stability. Of course, we have to be cautious due to still increased volatility of the stock market and several fundamental factors which can change the sentiment. And when I am talking about the fundamental reason, a very good example is the trade negotiation with China and the output. Currently, my idea is to find closed-end funds from the sector which still have higher... Read more