Is This 16% Yield an Income Investor's Dream or Too Good to Be True?

March 18, 2026 06:11:00 am

Source: Motley Fool

2026-03-18 06:11:00 ET

Closed-end funds (CEFs) are popular with many income investors because of their juicy distributions. Yield-hungry investors also often favor business development company (BDC) stocks for the same reason.

FS Credit Opportunities Corp. (NYSE: FSCO) offers two for the price of one. It's basically a BDC wrapped in a CEF. The fund is operated by Future Standards, a global alternative asset manager with $86 billion in assets under management.

The combination CEF/BDC's distribution yield currently tops 16%. Is this yield an income investor's dream? Or is it too good to be true?

FS Credit Opportunities Corp.

NASDAQ: FSCO

FSCO Trading

-1.67% G/L:

$4.995 Last:

967,563 Volume:

$5.03 Open: