Significant Net Asset Value Increases for Helios Funds

Includes: HAV, HIH, HMH, HSA

After the market close on Wednesday, June 15th, four Helios income funds which I follow - Helios Advantage Income (NYSE:HAV), Helios High Income Fund (NYSE:HIH), Helios Strategic Income Fund (NYSE:HSA) and Helios Multi-Sector High Income Fund (NYSE:HMH) - posted significant net asset value (NAV) increases ranging between 4.3% and 6.1%. After this NAV increase, all funds trade at discounts to NAV, as seen in the table below. All the funds yield between 7.9% and 9.3%. These funds invest in primarily below-investment-grade debt securities.

This is not the first time that a Helios income fund posted a significant one-day NAV increase. On October 27, 2010, HAV's NAV increased by 0.51, from 7.76 to 8.27. Over the course of the following four trading days, HAV's closing stock price increased from 7.34 to 7.77 - a significant move for a closed-end fund like HAV. As highlighted in this Seeking Alpha article, HAV received 3.3 million as a result of a court ruling for an asset had previously been written down to zero. Since a press release on the NAV increase was not issued by the company until November 1st, an investor not paying close attention to the NAV change missed out on an opportunity. These most recent NAV increases may offer a similar opportunity.

price 5.29 5.16 7.77 7.76
NAV 6.36 5.94 8.25 8.72
6/15 NAV change 4.95% 6.07% 4.30% 4.56%
discount -16.82% -13.13% -5.82% -11.01%
yield 7.94% 9.30% 9.27% 9.28%

Disclosure: I am long HSA, HMH, HAV.