FTHY: Monthly Distribution From High-Yield Fixed-Income Exposure

2025-12-10 13:24:26 ET

Written by Nick Ackerman, co-produced by Stanford Chemist

First Trust High Yield Opportunities 2027 Term Fund ( FTHY ) provides investors with high-yield fixed-income exposure through holding a bond and senior loan portfolio. The fund has consistently leaned toward a higher allocation of bonds, but the floating-rate senior loan exposure helps to mitigate the leverage costs for the fund. This is because both the borrowings and the underlying senior loan assets being held are based on floating rates. Therefore, as short-term rates gyrate due to the Fed adjusting its target rate—which we are in the rate-cutting cycle now—it helps to keep the borrowing costs offset by increased income-generation in the portfolio....

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