EDF: High Yield But Argentine Exposure And Overdistributing Are Risks

Summary

  • Emerging markets have a lot to like with their high bond yields and relatively low debt levels.
  • EDF is heavily exposed to Argentina, which has a very long history of financial mismanagement and debt defaults.
  • The fund is much less diversified than the emerging markets bond index.
  • The yield is a very attractive 10.87%, but it does not appear that the fund can actually afford the yield that it is paying out.
  • The valuation is extremely high given the risks.
  • Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More »

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One of the unfortunate side effects of the COVID-19 pandemic was the enormous surge in government deficit spending that accompanied it. The problem may be particularly acute in those nations that already had an

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This article was written by

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Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

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