UBS Asset Management now advises the Credit Suisse Asset Management Income Fund, which has de-risked its portfolio and reduced 'CCC' assets. CIK's portfolio now includes 40% 'BB' rated assets with a conservative leverage ratio of 23%, focusing mainly on HY bonds. The fund's dividend is well-supported, with 87.5% from net investment income and a small 12.5% ROC figure for September.
The Credit Suisse Asset Management Income Fund, Inc. offers a 9.17% yield, competitive with peers in the sector. The CIK closed-end fund's recent performance has been weaker than domestic investment-grade and junk bonds, but its distribution resulted in a better total return. The fund appears to have slightly reduced the portfolio's credit risk during the first half of 2024, which is probably due to analysts expecting an increase in defaults.
Credit Suisse Asset Management Income Fund (CIK) has a large allocation to CCC-rated bonds and 27% leverage ratio, making it a risk-on vehicle. CIK is currently trading at a 3.69% premium to net asset value, which is considered overextended versus its historic pattern.
We review CEF market valuation and performance through the second week of February and highlight recent market action. CEF price action was mixed, with higher-quality fixed-income sectors and interest-rate sensitive equity sectors seeing lower NAVs due to back-up in Treasury yields. CEF fees are full of pitfalls; however, getting a clear picture of fees can allow investors go generate alpha in CEF allocation.
The Credit Suisse Asset Management Income Fund has a yield of 8.71%, lower than some other funds investing in fixed-income securities. The fund's share price has increased by 19.69% since October 9, outperforming major bond indices. The fund's distribution yield is 8.71%, but it failed to fully cover its distributions with net investment income, relying on unrealized gains to make up the difference.
We review CEF market valuation and performance through the second week of November and highlight recent market action. Most CEF sectors struggled during the week, with only Muni sectors finishing in the green due to a reversal in Treasury yields. There is a misconception that the launch date of a fund gives it a locked-in yield position, but this is not true.
We review CEF market valuation and performance through the second week of October and highlight recent market action. CEFs had a good week; however, discount action remains depressed. Equity CEFs have to rely on total NAV performance to anchor their distributions rather than net income.
We discuss our move back to CIK - a mostly high-yield corporate bond CEF - that has been a strong performer in the sector. The fund's net income has been stable over the past two years due to a modest level of leverage and a pocket of floating-rate assets.
Credit Suisse Asset Management Income Fund, Inc offers a high level of income with a 10.42% yield, but that yield is not impressive compared to other income-focused closed-end funds. The fund has outperformed the Bloomberg U.S. Aggregate Bond Index this year by quite a lot. The fund invests heavily in junk bonds but has a diversified portfolio to mitigate default risk.
Credit Suisse Asset Management Income Fund is a fixed income closed end fund that has been affected by Credit Suisse's merger with UBS. The merger has voided the Investment Advisory Agreement, leading to a proxy vote on a new agreement, which could see UBS Investment Advisers take over. CIK's performance has been driven by its portfolio management team, which we think shareholders would want to remain in place following the merger.