11-21-2018, 10:55 AM
For those of you who followed me on the closed-end fund DHG, this is my new idea, KMM.
KMM is the Deutsche Multi-Market Income Trust, which is a term closed-end fund. The fund currently trades for $8.81. The fund invests in corporate high yield bonds (73%) and loans (18%). It's geographically 76% in the U.S. and 9% in Canada. The fund will liquidate by end of this year, so there's 0.556 years left before you get your money back. The effective duration is 3.51 years.
The fund trades at a 2.76% discount to NAV, which will obviously disappear by the time the fund liquidates in December. On an annualized basis, the closing of the discount will yield 4.96% (=2.76%/0.556yrs). The dividend is currently $0.0325 per month, so 4.43% annualized. Hence, between the discount and annualized dividend, I expect a total annualized return of 9.39% (=4.96%+4.43%).
This will be the third term closed-end fund I own to maturity.
Enjoy & good luck!
KMM is the Deutsche Multi-Market Income Trust, which is a term closed-end fund. The fund currently trades for $8.81. The fund invests in corporate high yield bonds (73%) and loans (18%). It's geographically 76% in the U.S. and 9% in Canada. The fund will liquidate by end of this year, so there's 0.556 years left before you get your money back. The effective duration is 3.51 years.
The fund trades at a 2.76% discount to NAV, which will obviously disappear by the time the fund liquidates in December. On an annualized basis, the closing of the discount will yield 4.96% (=2.76%/0.556yrs). The dividend is currently $0.0325 per month, so 4.43% annualized. Hence, between the discount and annualized dividend, I expect a total annualized return of 9.39% (=4.96%+4.43%).
This will be the third term closed-end fund I own to maturity.
Enjoy & good luck!