Credit Suisse Asset Management Income Fund

CIK

Market cap $160M

Credit Suisse Asset Management Income Fund offers a 9% yield and consistent monthly distributions, appealing to income-focused investors. CIK's reliance on net realized gains limits NAV growth, and the fund now trades at a rare premium to NAV, making accumulation less attractive. Exposure to high-yield bonds, leverage, and below investment-grade securities adds risk, especially if interest rate cuts are slow or insufficient.

Credit Suisse Asset Management Income Fund, Inc. offers a 9.06% yield, outperforming the junk bond index on a total return basis over ten years. CIK's net asset value has grown over the past 3 years, indicating sustainable distributions, but recent income and capital gains have not fully covered payouts. Bonds are unlikely to surge in price from the Fed's rate cuts, and will likely be a disappointing asset class to hold going forward.

CIK offers a high 9.4% yield with consistent monthly payouts, appealing for income-focused investors seeking diversification from equities. The fund's heavy exposure to below-investment-grade credit and moderate leverage increases risk, especially in a high-interest rate environment. CIK's NAV growth has been poor, with long-term price deterioration offsetting distribution gains, raising concerns about long-term sustainability.

We review the CEF market valuation and performance through the first week of April and highlight recent market action. Nearly all CEF sectors were down; Munis and Agencies saw gains due to the sharp drop in Treasury yields. BlackRock announced new CEF tender offers starting mid-April, impacting funds like BOE, BCX, BGY, BSTZ, and MVF, with a 2.5% share buyback at a 2% discount.

UBS Asset Management now advises the Credit Suisse Asset Management Income Fund, which has de-risked its portfolio and reduced 'CCC' assets. CIK's portfolio now includes 40% 'BB' rated assets with a conservative leverage ratio of 23%, focusing mainly on HY bonds. The fund's dividend is well-supported, with 87.5% from net investment income and a small 12.5% ROC figure for September.

The Credit Suisse Asset Management Income Fund, Inc. offers a 9.17% yield, competitive with peers in the sector. The CIK closed-end fund's recent performance has been weaker than domestic investment-grade and junk bonds, but its distribution resulted in a better total return. The fund appears to have slightly reduced the portfolio's credit risk during the first half of 2024, which is probably due to analysts expecting an increase in defaults.

Credit Suisse Asset Management Income Fund (CIK) has a large allocation to CCC-rated bonds and 27% leverage ratio, making it a risk-on vehicle. CIK is currently trading at a 3.69% premium to net asset value, which is considered overextended versus its historic pattern.

We review CEF market valuation and performance through the second week of February and highlight recent market action. CEF price action was mixed, with higher-quality fixed-income sectors and interest-rate sensitive equity sectors seeing lower NAVs due to back-up in Treasury yields. CEF fees are full of pitfalls; however, getting a clear picture of fees can allow investors go generate alpha in CEF allocation.

The Credit Suisse Asset Management Income Fund has a yield of 8.71%, lower than some other funds investing in fixed-income securities. The fund's share price has increased by 19.69% since October 9, outperforming major bond indices. The fund's distribution yield is 8.71%, but it failed to fully cover its distributions with net investment income, relying on unrealized gains to make up the difference.

We review CEF market valuation and performance through the second week of November and highlight recent market action. Most CEF sectors struggled during the week, with only Muni sectors finishing in the green due to a reversal in Treasury yields. There is a misconception that the launch date of a fund gives it a locked-in yield position, but this is not true.