Ares Dynamic Credit Allocation FundNYSE: ARDC

Ares Dynamic Credit Allocation Fund (ARDC) has continued to see strong performance, but it continues to be helped out by pushing further into a richer valuation. ARDC's dynamic investment approach makes it somewhat unique and the fund also offers a strong distribution yield of 9.2%, which is well covered for now. ARDC's current premium valuation suggests modest future returns and is one of the fund's main risks if the valuation reverts to a discount going forward.

Credit investing is like betting on horses to merely survive the race and make it around the track. Equity investing is like betting on horses to win, place or show. Credit bets are a lot easier to win than equity bets.

Ares Dynamic Credit Allocation Fund is a closed-ended fixed income fund managed by Ares Management LLC, primarily investing in below investment grade U.S. securities. ARDC is currently trading at a 4.5% premium to its NAV, making it less attractive for purchase at this time. The fund offers a 9.2% yield, but past yields were higher when the price was lower, making future gains and distributions uncertain.

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Income investors are eyeing high-yield fixed income vehicles with interest rates potentially declining in 2024. Ares Dynamic Credit Allocation Fund offers attractive total return through current income and capital appreciation, investing primarily in senior loans and corporate bonds. ARDC pays monthly distributions with a 12.08% yield, has outperformed its industry and the S&P 500, and is currently trading at a premium to NAV.

Ares Dynamic Credit Allocation Fund (ARDC) invests in a portfolio of different high yielding assets like bonds, loans, and CLOs. ARDC offers a 9.4% dividend yield and has shown a consistent distribution history, making it attractive for income investors. ARDC's portfolio benefits from floating rate investments and senior secured debt.

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Quantitative screens narrow down attractive closed-end fund candidates for further investigation. "Quality" report focuses on funds with coverage exceeding 100% to potentially reduce the risk of distribution cuts. Rankings provide shortlists for further research, not final buy or sell decisions.

The Ares Dynamic Credit Allocation Fund, Inc. is a closed-end fund designed to provide income-focused investors with a high level of income from their assets. The ARDC closed-end fund has a strong performance track record and is managed by Ares Management Corporation, known for being one of the best credit managers in the industry. The fund's portfolio is designed to generate strong returns regardless of whether interest rates go up or down, making it a good choice in the current uncertain interest rate environment.