FTHY: Discount Offers Alpha Potential On 11% Yielding Fund

First Trust High Yield Opportunities 2027 Term Fund’s NAV has fallen from $20 at inception to $14.24, indicating meaningful capital erosion despite distributions supporting total returns. The fund’s 11% yield is described as not close to covered, raising sustainability concerns. With less than 18 months until wind-down, the article suggests FTHY may still deliver decent total returns, but the setup is cautious and income-dependent.

Analysis

First Trust High Yield Opportunities 2027 Term Fund’s NAV has fallen from $20 at inception to $14.24, indicating meaningful capital erosion despite distributions supporting total returns. The fund’s 11% yield is described as not close to covered, raising sustainability concerns. With less than 18 months until wind-down, the article suggests FTHY may still deliver decent total returns, but the setup is cautious and income-dependent.