DLY: Limited Foreign Exposure And Above-Average Price
2025-05-31 03:49:52 ET
Summary
- DoubleLine Yield Opportunities Fund offers an attractive 8.94% yield, but lags peers in terms of yield.
- The fund has historically outperformed its peers on a total return basis, so the low relative yield makes sense.
- The fund's lack of transparency on foreign currency exposure raises concerns, especially given risks to U.S. dollar-denominated bonds.
- Distribution coverage is weak, relying on unrealized gains rather than net investment income or realized gains, which is a red flag.
- Trading near net asset value and above historical discounts, I recommend waiting for a better entry point before considering a purchase.
The DoubleLine Yield Opportunities Fund ( DLY ) is a closed-end fund that provides a method through which investors can achieve a very high level of income from the assets that they already possess. At this point, most regular readers are likely well aware that closed-end funds tend to have very high yields when compared to the broader market indices, and the DoubleLine Yield Opportunities Fund is no exception to this. As of the time of writing, the fund boasts an 8.94% yield, which compares quite favorably to any of the major domestic or international bond indices:
|
Index/ETF |
Current Yield |
|
Bloomberg U.S. Aggregate Bond Index ( AGG ) |
3.82% |
|
Bloomberg High Yield Very Liquid Index ( JNK ) |
6.62% |
|
Vanguard Total World Bond ETF ( BNDW ) |
3.99% |
|
J.P. Morgan EMBI Global Core Index ( EMB ) |
5.25% |
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DLY: Limited Foreign Exposure And Above-Average Price