Does MM like KKR Credit Income Fund (KKC) or Neuberger Berman Global Corporate Income trust (NBI) for Income?

Hi Jeff,

We have held NBI previously in the Income Portfolio selling it in April of 2021 at $1.88 for the following reason: This listed investment trust trades at a discount to NTA which is not ideal, however it is very much exposed to a large cross section of US Junk Bonds. As spreads hit record lows, the backdrop for NBI is as good as it gets in MM’s view.

NBI is a high yield global bond fund – or junk bonds in other words. While it’s trading at a discount to its asset backing, it has for a long time. Furthermore, as rates have risen, we suspect that most pain will happen in high yield credit, and NBI is exposed to this. We are not keen on NBI.

KKC is a little different, in that they invest across the KKR funds which hold all sorts of credit. Around 56% of it is traded credit and the rest is private credit where it’s hard to get pricing on. While we view KKR as a better manager and have considered this LIT, in the back of our minds, we’re still quiet cautious on private credit, and the lack of transparency around pricing. It is the same reason we sold out of Metrics (MXT) – which has tracked higher since we sold – but we’re just a little unsure in that part of the market.  When that happens, we tend to simplify things and own what we really understand and can price.  Hope that makes sense Jeff.

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KKR Credit Income Fund (KKC)

LAST UPDATED 29/09/2023 12:15

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KKR Credit Income Fund (KKC)

LAST UPDATED 29/09/2023 12:15