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The Virtus Stone Harbor Emerging Markets Income Fund (NYSE:EDF) is a closed-end fund, or CEF, that seeks to provide its investors with a very high level of income by investing in a portfolio of securities issued by
EDF: The Environment For Emerging Market Debt Has Changed
Summary
- The Virtus Stone Harbor Emerging Markets Income Fund offers a high 14.63% yield, which is higher than the fund's peers.
- The assets in the EDF closed-end fund are negatively influenced by U.S. tariffs and the U.S. dollar's decline, affecting emerging markets' ability to service U.S. dollar-denominated debt.
- The fund's allocation to local currency bonds is advantageous given the U.S. dollar's decline, but it still holds significant U.S. dollar-denominated debt.
- The weakness in the U.S. dollar suggests an international rejection, as current market trends are similar to what is experienced in a currency crisis.
- Despite a high yield, the EDF fund trades at a premium, making it expensive compared to peers, and investors should monitor management's portfolio adjustments.
- 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 »
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.Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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