Western Asset Investment Grade Income FundNYSE: PAI

Western Asset Inv Grade Income Fund Inc has been moving mostly sideways since our last update but continues to offer an attractive discount. The PAI closed-end fund is relatively conservative thanks to being a non-leveraged fund and investing primarily in investment-grade bonds. Potential upside opportunities could come from discount narrowing or rate cuts, though rate cut expectations have been being pushed back further and further.

The Western Asset Investment Grade Income Fund has a lower yield than most fixed-income closed-end funds and money market funds. The fund has outperformed the Bloomberg U.S. Aggregate Bond Index over the past six months, but it was beaten by some other investment-grade CEFs. The fund's strategy primarily focuses on investing in long-dated investment-grade bonds, which exposes it to interest rate risk.

Western Asset Investment Grade Income Fund's latest report reflects an increase in income generation year-over-year and quarter-over-quarter. The fund's discount remains attractive relative to its historical levels, making it a potentially attractive investment choice for conservative investors. PAI has increased its distribution and has a fully covered payout ratio, providing income for investors while waiting for potential appreciation and discount contraction to drive total returns.

The Western Asset Inv Grade Income Fund Inc has a current yield of 4.96%, lower than most money market funds. The PAI closed-end fund has outperformed bond indices over the past year, but its low yield and limited potential for capital gains make it unattractive. The fund's use of leverage is relatively low, but it also limits its ability to provide a higher yield.