The BlackRock Corporate High Yield Fund offers a 9.48% yield, appealing to retirees seeking high income with reasonable capital preservation compared to peers. Despite recent bond market declines, the fund's total return since September 2024 is 0.84%, outperforming investment-grade bonds but lagging junk bonds. The fund has been decreasing its exposure to floating-rate assets, which is the best move in the current monetary environment.
This analysis discusses HYT, a closed-end fund from BlackRock that invests in high-yield bonds. HYT has performed well in a rising interest rate environment, outperforming some peers. Currently, HYT trades at a premium to its net asset value, near historic highs.
The BlackRock Corporate High Yield Fund is an actively managed closed-end fund that invests in non-investment grade bonds. The current combination of increasing interest rates and historically low credit spreads brings attention to important risks to be mindful of. It is anticipated that high-yield bonds and the HYT fund may experience heightened volatility due to a more uncertain macroeconomic environment.
Many CEFs are currently trading at historically wide discounts to NAV but HYT is not. The BlackRock Corporate High Yield Fund is currently trading at a 1.3% discount to NAV, lower than its historical average of ~7.7%. HYT has a strong history of delivering solid results for shareholders on both an absolute and risk-adjusted basis.
BlackRock Corporate High Yield Fund, Inc offers a high level of income with a current yield of 10.70%, one of the highest in the market. The HYT closed-end fund has underperformed the Bloomberg U.S. Aggregate Bond Index and the Bloomberg High Yield Very Liquid Index over the past two months. Despite the underperformance, the HYT fund has a diversified portfolio and a reasonable level of leverage, making it an attractive option for income-seeking investors.
BlackRock Corporate High Yield Fund offers a 10.13% yield, providing investors with extra income in an inflationary environment. The fund's recent performance has been surprising, with its share price rising despite rising interest rates. The fund's focus on junk bonds and floating-rate assets may explain its strong recent performance as investors are fleeing into low-duration assets.
Investors are desperately in need of income due to the rising cost of living. BlackRock Corporate High Yield Fund, Inc. invests in a portfolio consisting primarily of junk bonds and then applies a layer of leverage to boost the effective yield to provide this income.