Barings Corporate Investors (MCI) Stock

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Barings Corporate Investors is a closed-end fund investing in privately placed, below-investment grade, long-term debt, with a strong 50-year performance record. MCI offers a high yield of 8.85%, making it ideal for income investors, though its current premium suggests a cautious approach. We believe it is an excellent fund for income investors in the high-yield bond category. Due to the significant premium, it is not an outright buy, but is well worth accumulating over time. For existing investors, it should be a long-term 'hold.'

MCI delivers high income with distributions fully covered by net investment income, outperforming benchmarks and peer group in the long run. Trust's focus on private placement securities may cause concern, but its positive track record and safety cushion from first lien senior secured loans provide some reassurance. MCI's high premium over NAV is not compelling. Potential investors may benefit from waiting for a lower entry point, despite strong performance and safe distributions.

CHARLOTTE, N.C.--(BUSINESS WIRE)--Barings Corporate Investors (NYSE: MCI) Board of Trustees met on May 16, 2024 to announce its preliminary financial results for the first quarter of 2024. Financial Highlights for the three months ended March 31, 2024 and December 31, 2023 are as follows: Net investment income increased to $8,072,938, or $0.40 per share, compared to $7,379,615, or $0.36 per share in the previous quarter. Net realized losses/gains also saw an increase to $1,770,637, or $0.08 per share, compared to $480,613.

Barings Corporate Investors is a closed-end fund that focuses on high-yielding corporate debt securities. MCI has outperformed the S&P 500 in total return since its inception in 1971, with a current dividend yield of 8.7%. The fund's portfolio primarily consists of private bank loans and floating rate debt, allowing it to benefit from higher interest rates. However, the portfolio consists of junk-rated companies.

Barings Corporate Investors (MCI) has been benefiting from the higher rate environment that we've been in. That's been driving the fund's distribution higher, and there is currently strong distribution coverage even after they raised once again with the latest announcement. However, with expectations of rate cuts in the coming years, MCI may see a decrease in distribution if rates are slashed more than expected.

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Barings Corporate Investors focuses on privately-placed, below-investment grade debt investments with occasional equity attributes. PIMCO Corporate and Income Opportunity Fund has a similar goal of maximizing total return through a dynamic asset allocation strategy. We compare the 2 high-yield funds and tell you why one is a clear winner.