Western Asset Diversified Income Fund (WDI) Stock

WDI pays a monthly distribution, has a termination date of 6/4/2033. WDI's valuations show a discount to NAV, but historical discounts have been deeper. The article provides a comprehensive overview of the fund's profile, including its dividend yield, holdings, and performance metrics.

Western Asset Diversified Income Fund (WDI) is a multi-sector fixed-income CEF that's been performing quite strongly, though with the trade-off of a narrowing discount. WDI's distribution yield is quite attractive at 11.85%, but coverage is tight, and with the Fed cutting rates, that will likely face even more pressure. Alternative multi-sector fixed-income funds are also richly valued, which I believe still makes WDI worth holding despite the less appealing discount and tight distribution coverage.

WDI offers an attractive 11.6% dividend yield, making it appealing for income-focused investors seeking supplemental income amid a low-return forecast for the S&P 500. The fund's diverse portfolio, primarily composed of high-yield credit investments, CLOs, and bank loans, supports its high distribution yield despite higher risk. Future interest rate cuts could enhance WDI's valuation and borrower environment, potentially boosting NAV growth and maintaining strong net investment income.

Western Asset Diversified Income Fund is a relatively new CEF selling at a discount, with high current income and capital appreciation objectives. WDI pays a monthly distribution, has a termination date of 6/4/2033, and has shown strong performance in 2023 and 2024. WDI's valuations show a discount to NAV, but historical discounts have been deeper, making it a potential buy during volatile periods like September-October.

We provide an update on the Western Asset Diversified Income Fund. Western Asset Diversified Income Fund recently increased its distribution, reflecting its record level of net income. WDI trades at a 7.6% discount and a 12.5% current yield.

The Western Asset Diversified Income Fund is still doing well and is close to reaching our discounted 'Buy' target. The fund's distribution is currently supported by net investment income, but this coverage may decrease as interest rates are expected to be cut in the future. WDI's portfolio is varied, with an emphasis on high-yield credit, collateralized loan obligations, commercial MBS, and bank loans.

Western Asset Diversified Income Fund has seen a decline in share price, but when factoring in dividends, the decline is only 6.5%. WDI is currently trading at a modest 7% discount to its Net Asset Value, presenting a compelling opportunity for investors. WDI offers a substantial 13.45% dividend yield, with its fund holding an average YTM of 13.05% with an average duration of 14+ years.

Western Asset Diversified Income Fund has posted strong Q3 2023 financial results, showing once again a fully supported distribution from net investment income. The fund carries a portfolio that consists of mostly below-investment-grade issuances, but it is diversified across hundreds of holdings and instruments. With the possibility of rate cuts in the future, distribution coverage may come under pressure, but most do not anticipate aggressive cuts (i.e., not returning to a zero rate environment).

The Western Asset Diversified Income Fund offers a competitive 12.56% current yield, making it attractive for income-seeking investors. The WDI closed-end fund has delivered a reasonable performance compared to other investments and indices, with a 3.43% total return since February 8, 2023. The fund's holdings include a variety of debt securities, providing diversification and potential performance in a rising interest rate environment.