Western Asset High Income Fund II

HIX

Market cap $379M

Some of our favorite bond funds (yielding 8%+) just took a header. And it's setting up the best buying opportunity we've seen in nearly three years for CEF investors.

Western Asset High Income Fund II offers a 13.6% yield and global diversification, appealing to income-focused investors. HIX's NAV has improved due to net realized gains, but high leverage and below-investment-grade holdings increase risk, especially in a high-rate environment. The fund's dividend appears sustainable, with recent earnings covering distributions at 163%, though payouts are taxed as ordinary income.

Western Asset High Income Fund II (HIX) offers a 13.64% yield, far surpassing major bond indices and most closed-end fund peers. HIX's high yield is undermined by declining net asset value and unsustainable distributions, raising concerns about future distribution cuts. Upcoming Federal Reserve rate cuts threaten HIX's income generation, especially from its floating-rate assets.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

NEW YORK--(BUSINESS WIRE)--Category: Fund Announcement.

Western Asset High Income Fund II offers a high 13.84% yield but cannot cover its distribution, consistently eroding its net asset value. The fund underperforms its benchmark indices over most timeframes, despite its higher yield. HIX has limited foreign currency exposure, although it does have a reasonable level of international bond holdings.

Western Asset High Income Fund II (HIX) offers a high dividend yield of 14.3%, but its inconsistent earnings history raises concerns about dividend sustainability. HIX's performance is heavily influenced by the interest rate environment, with higher rates negatively impacting its price and NAV over the past five years. The fund's leverage strategy and significant exposure to below-investment-grade credit increase its risk, especially in a prolonged high-interest-rate environment.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

It's a party on Wall Street! While the suits fawn over the hot “Trump trade” stocks, we dividend investors are going to dumpster dive.

HIX, a high-leverage fixed-income CEF, blends U.S. high-yield and emerging market bonds, making it a high beta play in the fixed-income space. With credit spreads at historic lows, leveraging up is imprudent; HIX's high beta nature magnifies risks in market downturns. HIX experienced a -36% drawdown in 2022. HIX's distribution is unsustainable, relying heavily on the return of capital, which erodes NAV and heightens vulnerability in market sell-offs.