SDHY: Short Duration Has Appeal, But There Could Be Better Alternatives
PGIM Short Duration High Yield Opportunities Fund offers a short-duration, high-yield portfolio, currently trading at a 7.85% discount and yielding 8.06%. SDHY has been more tactical with its use of leverage, which has varied, but the fund is currently not leveraged, with performance boosted by discount narrowing rather than NAV outperformance. Distribution coverage is subpar at 77% NII, but steady rates may help; the fund's term structure could eventually realize the discount for investors.
SDHY: Rating Downgrade To Buy Amid Yield Spread Dropping And Slowing Economy
Shrinking yield spread, economic slowdown, and rising recession risks, prompting a downgrade of SHDY from Strong Buy to Buy. SHDY remains a Buy for its 8.06% yield and portfolio diversification. Management and term-based liquidation offer some resilience amid uncertainties. Macro backdrops warrant caution on high-yield bonds currently sitting at high price levels. Consider funds with reduced risk for high-yield bonds investors.
SDHY: Short Duration HY CEF That Fails To Impress
PGIM Short Duration High Yield Opportunities Fund is a fixed income closed end fund from Prudential, focusing on shorter duration high yield bonds. The fund's performance has been disappointing, lagging behind peers and trading at a large discount to NAV due to poor timing in the market. SDHY needs a multi-year credit bull market to potentially improve its performance and narrow the discount to NAV, making it a less attractive option currently.
These 8.4%+ Bond Dividends Are Better Buys Now
This levitating stock market has brought back worries about a crash (and a recession). I know, I know.
