Best Performer High Yield Bond Closed End Funds 2011 Part 2

By
If you miss my first part of this Top Performer high yield bond CEF, please check the article. The following is the second part article. Investing in high yield bond funds may not be for every investor either long term or professional. There are several reasons to invest in this non investment grade bond funds:
  • The fund may provide high current income due to its high interest rates
  • It has priority of legal rights over preferred stocks and common stocks
  • It has potential for capital appreciation if the bond is upgraded by credit rating agencies due to improvement in company business
  • The bond fund is also less volatile than equity fund
The following is rated by its fund market performance up until May 6th, 2011. You will find the fund information below.

  1. Pacholder High Yield Fund
  2. PIMCO High Income Fund
  3. Credit Suisse High Yield Bond
  4. Pioneer Diversified High Income
  5. BlackRock Debt Strategies Fund
  6. DWS High Income Trust
  7. First Trust Strategic High Income
  8. Managed High Yield Plus
  9. Western Asset High Income Fund II
  10. Wells Fargo Advantage Income Opportunities
updated on 6/1/2011


NoFund NameTickerClosing PriceEffective LeverageDistribution RatePremium / DiscountMarket CapUNIIAvg Duration
6DWS High Income TrustKHI$10.42 29.36%8.64%4.83%$168M$0.27
7First Trust Strategic High IncomeFHI$3.67 21.50%9.81%-10.71%$34M($0.42)3.48 years
8Managed High Yield PlusHYF$2.42 22.31%9.92%6.14%$149M$0.02
9Western Asset High Inc Fund IIHIX$10.29 23.74%9.91%7.19%$864M$0.08
10Wells Fargo Advantage Income OpportunitiesEAD$10.58 21.58%9.64%4.03%$741M($0.15)4.41 years

6. DWS High Income Trust

DWS High Income Trust
DWS High Income Trust details
DWS High Income Trust fund seeks high current income and capital appreciation through investment in high yield US corporate fixed income obligations. The fund manager is Gary Sullivan since 2006. The fund inception is April 1988. This DWS fund has net total assets of $227 million with 29.36% effective leverage. The fund also has an expense ratio of 1.78% per year. The fund market price has returned 38.27 over the past year and 7.66% over the past decade. The fund also has a yield of 8.64% per year. This dividend is paid monthly.

As of May 2011, the top securities types of this KHI fund are corporate bonds (92%), loan participations & assignments (6%), preferred securities (1%), and cash equivalents (1%). The geographic distributions are as follows: United States (82%), Canada (4%), United Kingdom (3%), Germany (3%), Others (3%), Bermuda (2%), and Luxembourg (2%). Top 6 bond sectors include other (19%), consumer discretionary (17%), financials (14%), telecommunication services (13%), materials (12%), and industrials (10%).

7. First Trust Strategic High Income

FHI fund details
This fund year to date return in this high yield bond class is 14.30%. The First Trust Strategic High Income fund objective is to provide high current income with capital growth through investment in non investment grade mortgage backed, asset backed and equity securities. The fund has an annual expense ratio of 2.68%. This FHI fund has returned 34.02% over the past year and -21.91% over the past 3 years. It also has an average duration of 3.48 years. It currently has a total asset of $47.91 million with 21.5% effective leverage. The fund was established on July 2005. The fund is managed by team from First Trust Advisors.

As May 2011, the fund pays a distribution rate of 9.81% per year. This distribution or dividend is paid monthly. The top 5 sectors as of April 2011 are corporate bonds and notes (77.9%), residential mortgage backed securities RMBS (10%), commercial mortgage backed securities CMBS (5.9%), manufactured housing loans (5.3%), and senior floating rate note (0.4%).

8. Managed High Yield Plus

As part of UBS Global Asset Management CEF, Managed High Yield Plus fund seeks high current income with capital preservation through investment in non investment grade income producing debt securities, equity securities that are attached to debt securities and emerging markets securities. The fund managers are Craig Ellinger and Matthew Iannucci since June 2010. This managed high yield plus has 5.97 years modified duration. The total annual expense ratio of this Managed High Yield Plus fund is 1.93%. The fund also has a yield of 9.92% per year.
The HYF fund also consists of 290 holdings.  The fund average maturity is 7.10 years and the fund modified duration is 5.97 years. As of January 2011, the fund top 5 sectors are gaming (8.5%), energy exploration / production (4.5%), support services (4.3%), and consumer / commercial lease (3.7%). The fund asset allocations is as follow: high yield corporate bond (102%), general debt (2%), equity (0.03%), and cash (-4.62%).

9. Western Asset High Income Fund II

Western Asset High Income Fund II details
As part of Legg Mason division, the Western Asset High Income Fund II seeks high current income by investing in high yield (non investment grade) debt securities. This Western Asset fund is managed by team of managers includes Michael C. Buchanan, Keith J Gardner, Kenneth Leech, and Stephen A Walsh since 2006.  The expense ratio of this Western Asset fund is 2.12% per year. The fund also has an effective leverage of 23.74%. The fund has returned 30.73% over the past year and 17.08% over the past three year. This fund is rated 4 stars by Morningstar.
As of April 2011, the top 6 sectors include consumer discretionary (18.9%), finance companies (15.5%), energy (14.5%), industrials (12%), communications (10%), and materials (9.5%). The fund average duration is 5.22 years. This fund has 425 holdings in its asset.

10. Wells Fargo Advantage Income Opportunities

The Wells Fargo Advantage Income Opportunities fund seeks current income with capital appreciation. This Wells Fargo Advantage fund invests most of asset in below investment grade debt securities, loans and preferred stocks. This fund also has an annual expense ratio of 1.13% and a yield of 9.63% per year. It received 3 stars rating by Morningstar.

As of January 2011, the top 6 sectors include financials (21%), consumer discretionary (16%), energy (13.8%), utilities (11%), telecommunication service (10.4%), industrials (9.4%), and information technology (7.9%). The fund has returned 9.35% over the past 3 year and 6.26% over the past 5 year.

14. Dreyfus High Yield Strategies

The Dreyfus High Yield Strategies fund objective is to provide high current income with capital appreciation through investment in US and foreign issued non investment grade debt securities and defaulted securities. This Dreyfus fund also has 4 stars Morningstar rating. This fund average duration is 5.30 years. The fund total net asset is $302 million with 23.32% effective leverage. The fund is managed by Michael Gray and Martha B. Metcalf since 2005.

The top 8 sectors distribution as of April 2011 include telecommunications (16.34%), diversified financial services (12.97%), media (10.12%), commercial & professional services (7.64%), health care (7.10%), oil & gas (4.93%), retail (4.44%), and chemicals (4.2%).

15. First Trust Strategic High Income 2

This is another First Trust fund in this top 20 performer list with 12.58% YTD return. The First Trust Strategic High Income 2 fund seeks high current income with capital growth through investment in non investment grade and investment grade debt and equity securities. The fund expense ratio is 2.28% per year including 2.21% baseline expense and 0.07% interest expense. The fund inception date is March 21, 2006. The fund has returned -15.73% over the past 3 year and -12.50% over the past 5 year. The fund also has 2 stars rating from Morningstar.
As of April 2011, the top 5 sectors include corporate bonds and notes (76.6%), residential mortgage backed securities RMBS (12.1%), commercial mortgage backed securities CMBS (5.5%), manufactured housing loans (5.2%), and senior floating rate note (0.4%). The fund average duration is 4.94 years. There are 117 bonds in its asset.

Disclosure: No Position