This is a quick note to let you know the High Income NOW Portfolio has been updated for October. There was one new purchase, one complete sale and two small rebalances. Here are the details.
New Purchase:
Duff & Phelps Utility & Infrastructure (DPG) Yield: 9.7%
We added shares of this big-yield contrarian opportunity. The Utility Sector is out of favor and investors have dramatically overreacted to a distribution rightsizing. This fund is more attractive going forward and trades at a large discount to NAV. You can read our recent report on DPG here.
Complete Sale
DoubleLine Yield Opportunities (DLY), Yield: 9.5%
This fund had been a strong performer for us this year, and it now trades at only a small discount to NAV (it usually trades at a larger discount per its z-scores). Additionally, this fund has a lot of below investment grade (junk) credit/bonds. This group has performed very well lately, and credit spreads are now very low. Credit spread is the difference in yield between treasuries and junk bonds. A lot of things can happen to disrupt the low credit spreads, and they likely won’t last for long. We could revisit this fund again if spreads blow out in a market distress situation, but for now we’re happy to take the profits and reallocate the dollars to a different high income opportunity (i.e. DPG, see above).
Rebalances:
We slightly increased our positions in:
BlackRock Health Sciences (BMEZ): Read the report
PIMCO Access Income Fund (PAXS): This remains a top position.
High Income NOW Portfolio:
You can view the full portfolio here.