High Yield Spotlight

With inflation coming in hotter than expected, the Fed looking more and more unlikely to cut rates anytime soon and the yen on the verge of collapse, the bond market is starting to become more volatile. The possible range of outcomes this year is quite large. That’s why it may be a good time for investors to consider managing some risk. That’s why I’m taking a look at the Franklin Limited Duration Income Trust (FTF) today.

This week’s inflation report once again enhanced the case for why the Fed is going to have a lot of difficulty justifying rate cuts later this year. The latest inflation data shows that more defensive strategies may have an opportunity to outperform soon. One fund that recently made the case for consideration is the Eaton Vance Enhanced Equity Income Fund II (EOS).

Two segments of the market that have struggled to keep up over the past year - international stocks and dividend stocks - have slowly been making a comeback. That potentially presents a window of opportunity for covered call strategies to outperform. The BlackRock Enhanced Global Dividend Trust (BOE) is one fund on my radar that may be able to take advantage of all of these factors.