NHS: The High Yield Is Not A Reason To Own This Fund (Rating Downgrade)

Summary The Neuberger High Yield Strategies Fund offers a 19.15% yield but struggles to cover its distribution, risking net asset value destruction. NHS is almost entirely allocated to fixed-rate high-yield bonds, making it vulnerable in a rising rate and inflationary environment. Despite trading at an 11.13% discount to NAV, NHS has underperformed junk bond indices and is not earning enough to justify its payout. I find it difficult to recommend NHS, as its high yield is unsustainable amid persistent inflation, rising rates, and ongoing NAV erosion. Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More » PM Images/DigitalVision via Getty Images The Neuberger High Yield Strategies Fund ( NHS ) is a closed-end fund that aims to provide its investors with a high level of total return, which it attempts to achieve by investing in the high-yield bond This article was written by Power Hedge 16.25K Followers Follow Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields. He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.