We rate DBS Strong Buy. The fund provides a way for investors to access our two favorite fixed-income sectors, high-yield debt and floating-rate bank loans,at a discount. DBS invests about 58% of its portfolio in high yield debt and 42% in floating rate bank loans of companies with below investment grade ratings. The fund is well diversified, investing in over 180 different issuers in over 40 industries. In our view, DBS is fully earning its dividend and we believe that this level can continue. DBS is approximately 28% leveraged through a revolving credit and term-loan facility.
It sells at about a 14% discount. I own it and think that it has hit bottom.
Check out Bancroft Convertible Closed End Fund. Thay are at a 20% discount and paying bwtween 12-15% dividend. They have a long and public history. Very stable dividend for 10 years. Their top ten investments are high quality companies.