Q: I own a considerable amount of HYLD, but question the use of 25% leverage. I am considering switching to SMAX, but am wondering if they are so similar, that it is not worth switching.
Could you offer me your opinion on which one you would prefer for an income orientated senior investor.
Could you offer me your opinion on which one you would prefer for an income orientated senior investor.
5i Research Answer:
Other than leverage, we would consider them very similar. Leverage of course works both ways. Even with a strong start to the year, though, SMAX is outperforming HYLD, even with no leverage. We think HYLD is fine overall, but in a straight-up contest we would side with SMAX, especially if one is not entirely comfortable with leverage.