High Yield Spotlight

The fixed income space has gotten increasingly complicated for investors. As inflation expectations have normalized, bond yields have come down accordingly. On the other hand, we’ve got a fair amount of evidence that the economy is slowing. That makes the bond market a dangerous place to play. The BlackRock Income Trust (BKT), which focuses on agency mortgage-backed securities, is one of those funds that could be in a good position or a bad position.

Even though the VIX has come back down to earth, a huge sense of volatility remains. Returns suggest big swings in terms of longer-term market sentiment and confusion over whether stocks should be up or down. This kind of environment may be a signal that investors should consider backing off on risk. The Gabelli Equity Trust (GAB) is focused on more value-oriented companies, which could be a nice counterweight to S&P 500 or tech-tilted portfolios.

A lot of investors received a hard lesson over the past month about the risk of unexpected market volatility and portfolio over-concentration. I often say that you’re not really diversified unless there’s something you hate in your portfolio. One of the easiest ways to diversify is via dividend stocks. The abrdn Total Dynamic Dividend Fund (AOD) has a few things working in its favor at the moment.