Given the lack of new issues coming to market, I wonder if Oliver would be interested in doing an analysis on these two investment trusts, SMIF and CMHY.
SMIF pays a monthy distribution, currently 0.50p a month, and yielding about 6.1% at the time of writing. Trading at around 2-3% premium.
CMHY pays a quarterly distribution, currently 2.50 a quarter, and yielding about 5.4% at time of writing. Trading also at a premium of 2-3%, a few basis points higher than SMIF.
When looking at the latest accounts for SMIF, I was a bit surprised at the income statement, which seems to show that the fund is not generating enough income to pay the monthly distribution and thus cash reserves are going down quickly.
Could more enlightened minds share their thoughts about these two high-yield bond investment trusts please?
What are the risks/probabilities of these investment trusts blowing up? How can we find out the most recent leverage figures?
I would not mind too much if they move to a discount as long as income distributions are stable.
I was happy getting 6% yield with my small holding in SMIF and I was expecting share price would go down as the market would price in rising yields at some point in the near future....but looking at the SMIF accounts has got me a bit worried now. Any views in the forum?