FTHY: Avoid This Ticking Clock From The HY CEF Segment
The First Trust High Yield Opportunities 2027 Term Fund (FTHY) is a term CEF set to liquidate in August 2027, offering NAV payout at termination. FTHY trades at a -2.6% discount to NAV, presenting potential for discount closure upon liquidation, but carries structural risks. The portfolio's average maturity of 5.19 years mismatches the fund's one-year remaining tenor, exposing investors to market risk if credit spreads widen.
FTHY: Discount Offers Alpha Potential On 11% Yielding Fund
First Trust High Yield Opportunities 2027 Term Fund's NAV has declined from $20 to $14.24 since inception, with distributions sustaining total returns but eroding capital. The fund's 11% yield is not close to covered. With less than a 18 months to a wind-down, FTHY may offer decent total returns.
FTHY: Monthly Distribution From High-Yield Fixed-Income Exposure
First Trust High Yield Opportunities 2027 Term Fund offers high-yield fixed-income exposure with a ~5.5% discount and a term structure set to liquidate by Aug. 1, 2027. FTHY's blend of bonds and floating-rate senior loans helps offset leverage costs, while its 10.72% distribution yield is attractive but not fully covered by net investment income. The fund's portfolio is heavily tilted toward below-investment-grade debt, including a meaningful allocation to CCC-rated securities, presenting heightened credit risk.
FTHY: Worth Monitoring For Term Opportunities
FTHY has seen its discount narrowing further since our last update as we enter into the final couple of years before its potential liquidation. The fund offers a high 10.26% distribution yield, but NII coverage is weak, leading to an ongoing need for capital appreciation to cover or face NAV erosion. FTHY's hybrid portfolio of high-yield bonds and senior loans is highly diversified, but tight high-yield spreads limit the margin of safety.
FTHY: Discount Narrows On This Term Fund
First Trust High Yield Opportunities 2027 Term Fund provides a high monthly distribution yield with a portfolio of high-yield bonds and senior loans. The fund's discount has narrowed since our last update, but with a term structure to potentially realize the discount in the future, it is worth continuing to watch. With the latest annual report, we've noticed that distribution coverage has remained pressured, but they seem content to continue to keep the payout where it is.
FTHY: A Very Good Bond Fund For Retirement Income
First Trust High Yield Opportunities 2027 Term Fund offers a 10.89% yield and is set to be liquidated in 2027. The TFHY closed-end fund underperformed bond indices over the past three years, but may provide capital gains as the termination date nears. The fund includes some foreign exposure, but not nearly as much as other global funds.
