First Trust High Yield Opportunities 2027 Term Fund Decreases its Monthly Common Share Distribution to $0.125 Per Share for November
First Trust High Yield Opportunities 2027 Term Fund (NYSE: FTHY) has decreased its monthly common share distribution to $0.125 per share from $0.13 per share, payable on November 25, 2024. The distribution rate is 9.70% based on the October 18, 2024 NAV of $15.47 and 10.07% based on the closing market price of $14.89. This represents a 3.85% decrease from the previous distribution.
The Fund invests at least 80% of its managed assets in high yield debt securities rated below investment grade. These include U.S. and non-U.S. corporate debt obligations and senior, secured floating rate loans. The Fund's investment objective is to provide current income, and it has a practice of seeking to maintain a relatively stable monthly distribution.
First Trust Advisors L.P. (FTA) serves as the Fund's investment advisor, with approximately $245 billion in assets under management as of September 30, 2024.
Il First Trust High Yield Opportunities 2027 Term Fund (NYSE: FTHY) ha diminuito la sua distribuzione mensile di azioni ordinarie a $0.125 per azione rispetto a $0.13 per azione, pagabile il 25 novembre 2024. Il tasso di distribuzione è 9.70% basato sul NAV del 18 ottobre 2024 di $15.47 e 10.07% basato sul prezzo di mercato di chiusura di $14.89. Questo rappresenta un 3.85% di diminuzione rispetto alla distribuzione precedente.
Il Fondo investe almeno l'80% dei suoi attivi gestiti in titoli di debito ad alto rendimento classificati al di sotto del grado di investimento. Questi includono obbligazioni societarie statunitensi e non, e prestiti senior a tasso variabile garantiti. L'obiettivo di investimento del Fondo è fornire un reddito corrente e ha una prassi di cercare di mantenere una distribuzione mensile relativamente stabile.
First Trust Advisors L.P. (FTA) funge da consulente per gli investimenti del Fondo, con circa $245 miliardi di attivi sotto gestione al 30 settembre 2024.
El First Trust High Yield Opportunities 2027 Term Fund (NYSE: FTHY) ha disminuido su distribución mensual de acciones comunes a $0.125 por acción desde $0.13 por acción, pagadera el 25 de noviembre de 2024. La tasa de distribución es 9.70% basada en el NAV del 18 de octubre de 2024 de $15.47 y 10.07% basada en el precio de cierre del mercado de $14.89. Esto representa una disminución del 3.85% respecto a la distribución anterior.
El Fondo invierte al menos el 80% de sus activos gestionados en valores de deuda de alto rendimiento clasificados por debajo del grado de inversión. Estos incluyen obligaciones de deuda corporativa estadounidenses y no estadounidenses, y préstamos senior garantizados a tasa variable. El objetivo de inversión del Fondo es proporcionar ingresos actuales, y tiene la práctica de buscar mantener una distribución mensual relativamente estable.
First Trust Advisors L.P. (FTA) actúa como asesor de inversiones del Fondo, con aproximadamente $245 mil millones en activos bajo gestión a partir del 30 de septiembre de 2024.
퍼스트 트러스트 하이 일드 기회 2027 기한 펀드(출처: FTHY)는 일반 주식 분배금을 주당 $0.125로 줄였습니다, 이전에는 주당 $0.13에서, 2024년 11월 25일에 지급됩니다. 분배율은 2024년 10월 18일 기준의 NAV를 기준으로 9.70%이며 종가를 기준으로 10.07%입니다. 이는 이전 분배금에 비해 3.85% 감소한 것입니다.
이 펀드는 관리 자산의 최소 80%를 투자 등급 이하의 고수익 채무 증권에 투자합니다. 여기에는 미국 및 비미국 법인 채무와 선순위, 담보 장기변동금리 대출이 포함됩니다. 펀드의 투자 목표는 현재 수익을 제공하는 것이며, 비교적 안정적인 월별 분배를 유지하려는 노력을 하고 있습니다.
퍼스트 트러스트 어드바이저스 L.P. (FTA)는 펀드의 투자 자문사로, 2024년 9월 30일 기준으로 약 2450억 달러의 자산을 관리하고 있습니다.
Le First Trust High Yield Opportunities 2027 Term Fund (NYSE: FTHY) a diminué sa distribution mensuelle d’actions ordinaires à $0.125 par action contre $0.13 par action, payable le 25 novembre 2024. Le taux de distribution est de 9.70% basé sur la NAV du 18 octobre 2024 de $15.47 et 10.07% basé sur le prix de marché à la clôture de $14.89. Cela représente une diminution de 3.85% par rapport à la distribution précédente.
Le Fonds investit au moins 80% de ses actifs gérés dans des titres de créance à haut rendement classés en dessous de la note d'investissement. Cela inclut des obligations d'entreprises américaines et non américaines ainsi que des prêts à taux variable garantis. L'objectif d'investissement du Fonds est de fournir un revenu courant, et il pratique de rechercher à maintenir une distribution mensuelle relativement stable.
First Trust Advisors L.P. (FTA) sert de conseiller en investissements pour le Fonds, avec environ 245 milliards de dollars d'actifs sous gestion au 30 septembre 2024.
Der First Trust High Yield Opportunities 2027 Term Fund (NYSE: FTHY) hat die monatliche Ausschüttung für Stammaktien auf $0.125 pro Aktie gesenkt von $0.13 pro Aktie, zahlbar am 25. November 2024. Der Ausschüttungssatz beträgt 9.70% basierend auf dem NAV vom 18. Oktober 2024 von $15.47 und 10.07% basierend auf dem Schlusskurs von $14.89. Dies entspricht einem 3.85% Rückgang gegenüber der vorherigen Ausschüttung.
Der Fonds investiert mindestens 80% seiner verwalteten Vermögenswerte in Hochzinsanleihen, die unterhalb des Investment-Grade-Ratings eingestuft sind. Dazu gehören Unternehmensschuldverschreibungen aus den USA und dem Ausland sowie nachrangige, besicherte, variabel verzinsliche Kredite. Das Anlageziel des Fonds ist es, laufende Erträge zu erzielen, und er hat sich zur Aufgabe gemacht, eine relativ stabile monatliche Ausschüttung aufrechtzuerhalten.
First Trust Advisors L.P. (FTA) fungiert als Anlageberater des Fonds und verwaltet ungefähr $245 Milliarden an Vermögen zum 30. September 2024.
- Monthly distribution rate of 9.70% based on NAV and 10.07% based on market price
- Fund invests in high yield debt securities, potentially offering higher returns
- Practice of maintaining relatively stable monthly distributions
- Large asset base of advisor ($245 billion AUM) suggests experienced management
- Decrease in monthly distribution from $0.13 to $0.125 per share (-3.85%)
- High yield securities are considered speculative and carry higher credit risk
- Fund is subject to market risk, interest rate risk, and potential loss of investment
- Planned termination on or about August 1, 2027, may require selling assets at unfavorable times
Insights
The decrease in monthly distribution from
However, investors should note that the distribution may consist of net investment income, return of capital and possibly short-term capital gains. The inclusion of return of capital could indicate that the fund is not generating enough income to cover its distribution, potentially eroding the NAV over time. This practice of maintaining a stable distribution, while beneficial for market price stability, may not be sustainable long-term if it relies heavily on return of capital.
The fund's focus on high-yield debt securities and senior loans exposes it to credit risk and interest rate sensitivity. In the current economic climate, with potential rate changes and credit market uncertainties, these factors warrant close monitoring. The fund's planned termination in 2027 also adds a layer of consideration for long-term investors, as it may result in forced asset sales near the end of its term.
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This distribution will consist of net investment income earned by the Fund and return of capital and may also consist of net short-term realized capital gains. The final determination of the source and tax status of all distributions paid in 2024 will be made after the end of 2024 and will be provided on Form 1099-DIV.
The Fund has a practice of seeking to maintain a relatively stable monthly distribution which may be changed periodically. First Trust Advisors L.P. ("FTA") believes the practice may benefit the Fund's market price and premium/discount to the Fund's NAV. The practice has no impact on the Fund's investment strategy and may reduce the Fund's NAV.
The Fund is a diversified, closed-end management investment company. The Fund's investment objective is to provide current income. Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least
First Trust Advisors L.P. ("FTA") is a federally registered investment advisor and serves as the Fund's investment advisor. FTA and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately
Principal Risk Factors: Risks are inherent in all investing. Certain risks applicable to the Fund are identified below, which includes the risk that you could lose some or all of your investment in the Fund. The principal risks of investing in the Fund are spelled out in the Fund's annual shareholder reports. The order of the below risk factors does not indicate the significance of any particular risk factor. The Fund also files reports, proxy statements and other information that is available for review.
Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.
Market risk is the risk that a particular investment, or shares of a fund in general may fall in value. Investments held by the Fund are subject to market fluctuations caused by real or perceived adverse economic conditions, political events, regulatory factors or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund and its investments.
Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates; however, the Federal Reserve has recently lowered interest rates and may continue to do so. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between
The Fund will typically invest in securities rated below investment grade, which are commonly referred to as "junk" or "high yield" securities and considered speculative because of the credit risk of their issuers. Such issuers are more likely than investment grade issuers to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the Fund's NAV and income distributions. An economic downturn would generally lead to a higher non-payment rate, and a high yield security may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a high yield security may decline in value or become illiquid, which would adversely affect the high yield security's value.
The debt securities in which the Fund invests are subject to certain risks, including issuer risk, reinvestment risk, prepayment risk, credit risk, and interest rate risk. Issuer risk is the risk that the value of fixed-income securities may decline for a number of reasons which directly relate to the issuer. Reinvestment risk is the risk that income from the Fund's portfolio will decline if the Fund invests the proceeds from matured, traded or called bonds at market interest rates that are below the Fund portfolio's current earnings rate. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the Fund derives interest income will be reduced. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates.
Senior Loans are structured as floating rate instruments in which the interest rate payable on the obligation fluctuates with interest rate changes. As a result, the yield on Senior Loans will generally decline in a falling interest rate environment, causing the Fund to experience a reduction in the income it receives from a Senior Loan. In addition, the market value of Senior Loans may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the rise in interest rates and the reset. Many Senior Loans have a minimum base rate, or floor, which will be used if the actual base rate is below the minimum base rate. To the extent the Fund invests in such Senior Loans, the Fund may not benefit from higher coupon payments during periods of increasing interest rates as it otherwise would from investments in Senior Loans without any floors until rates rise to levels above the floors. As a result, the Fund may lose some of the benefits of incurring leverage. Specifically, if the Fund's borrowings have floating dividend or interest rates, its costs of leverage will increase as rates increase. In this situation, the Fund will experience increased financing costs without the benefit of receiving higher income. This in turn may result in the potential for a decrease in the level of income available for dividends or distributions to be made by the Fund.
The senior loan market has seen a significant increase in loans with weaker lender protections including, but not limited to, limited financial maintenance covenants or, in some cases, no financial maintenance covenants (i.e., "covenant-lite loans") that would typically be included in a traditional loan agreement and general weakening of other restrictive covenants applicable to the borrower such as limitations on incurrence of additional debt, restrictions on payments of junior debt or restrictions on dividends and distributions. Weaker lender protections such as the absence of financial maintenance covenants in a loan agreement and the inclusion of "borrower-favorable" terms may impact recovery values and/or trading levels of senior loans in the future. The absence of financial maintenance covenants in a loan agreement generally means that the lender may not be able to declare a default if financial performance deteriorates. This may hinder the Fund's ability to reprice credit risk associated with a particular borrower and reduce the Fund's ability to restructure a problematic loan and mitigate potential loss. As a result, the Fund's exposure to losses on investments in senior loans may be increased, especially during a downturn in the credit cycle or changes in market or economic conditions.
To the extent a fund invests in floating or variable rate obligations that use the London Interbank Offered Rate ("LIBOR") as a reference interest rate, it is subject to LIBOR Risk. LIBOR has ceased to be made available as a reference rate and there is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate ("SOFR"), will be similar to or produce the same value or economic equivalence as LIBOR. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on a fund or on certain instruments in which a fund invests is difficult to predict and could result in losses to the fund.
A second lien loan may have a claim on the same collateral pool as the first lien or it may be secured by a separate set of assets. Second lien loans are typically secured by a second priority security interest or lien on specified collateral securing the borrower's obligation under the interest and present a greater degree of investment risk. These loans are also subject to the risk that borrower cash flow and property securing the loan may be insufficient to meet scheduled payments after giving effect to those loans with a higher priority. These loans also have greater price volatility than those loans with a higher priority and may be less liquid. However, second lien loans often pay interest at higher rates than first lien loans reflecting such additional risks.
The Fund intends to terminate on or about August 1, 2027. Because the assets of the Fund will be liquidated in connection with the termination, the Fund may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, which may cause the Fund to lose money. The Fund is not a "target term" Fund and its primary objective is to provide high current income. As a result, the Fund may not return the Fund's initial public offering price of
Investing in securities of non-
Investing in emerging market countries, as compared to foreign developed markets, involves substantial additional risk due to more limited information about the issuer and/or the security (including limited financial and accounting information); higher brokerage costs; different accounting, auditing and financial reporting standards; less developed legal systems and thinner trading markets; the possibility of currency blockages or transfer restrictions; an emerging market country's dependence on revenue from particular commodities or international aid; and the risk of expropriation, nationalization or other adverse political or economic developments.
Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
The Fund's portfolio is subject to credit risk, interest rate risk, liquidity risk, prepayment risk and reinvestment risk. Interest rate risk is the risk that fixed-income securities will decline in value because of changes in market interest rates. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and that the value of a security may decline as a result. Credit risk may be heightened for the Fund because it invests in below investment grade securities. Liquidity risk is the risk that the fund may have difficulty disposing of senior loans if it seeks to repay debt, pay dividends or expenses, or take advantage of a new investment opportunity. Prepayment risk is the risk that, upon a prepayment, the actual outstanding debt on which the Fund derives interest income will be reduced. The Fund may not be able to reinvest the proceeds received on terms as favorable as the prepaid loan. Reinvestment risk is the risk that income from the Fund's portfolio will decline if the Fund invests the proceeds from matured, traded or called instruments at market interest rates that are below the Fund's portfolio's current earnings rate.
The risks of investing in the Fund are spelled out in the shareholder report and other regulatory filings.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
The Fund's daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at https://www.ftportfolios.com or by calling 1-800-988-5891.
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Source: First Trust High Yield Opportunities 2027 Term Fund
FAQ
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