Managed High Yield Plus Fund Inc.—Dividend declaration, fund commentary, and updated price and yield information
March 15 2010 - 4:05PM
Business Wire
Managed High Yield Plus Fund Inc. (the "Fund") (NYSE: HYF), a
closed-end management investment company, today announced that the
Fund’s Board of Directors has declared a dividend from net
investment income of $0.0195 per share. The dividend is payable on
March 31, 2010 to shareholders of record as of March 25, 2010. The
ex-dividend date is March 23, 2010. Managed High Yield Plus Fund
Inc. seeks high income and, secondarily, capital appreciation,
primarily through investments in lower-rated, income producing debt
and related equity securities.
Fund Commentary for the month of February 2010 from UBS
Global Asset Management (Americas) Inc. (“UBS Global AM”), the
Fund’s investment advisor
While the weakness in the US High Yield market continued into
February, the market rallied from its lows near mid-month, as the
anxiety surrounding the possible Greek default dissipated. The
Greek government took active steps to resolve their own fiscal
issues, and the stronger EU countries lent support to these
programs. The situation in Europe highlighted the interconnectivity
of global financial markets, as most investors feared the
potentially negative impacts of a weakened European Monetary
Union.
The high yield market was also jolted during the month with
approximately $2.3 billion in high yield mutual fund redemptions,
the largest outflow since 2005. The significance of this event was
short-lived as the market began to slowly tighten after the third
week’s report showed that the outflows had ceased. In addition, as
financial results from the full year of 2009 began to trickle in,
most companies beat their estimates and investors took comfort in a
relatively positive outlook provided by the issuers.
As investors became more risk aware, CCC and B rated securities
underperformed, while BB rated issues outperformed. Sectors with
large CCC rated security exposure such as gaming,
printing/publishing and electric all underperformed, while the
general industrials, capital goods, packaging and healthcare
outperformed. Defaults, as measured by the rolling
last-twelve-months, fell again to 7.4% from 8.1% in the previous
month (as measured by JP Morgan).
The new issue market remained consistent, in spite of the slight
weakness in the market, with $16.2 billion of new deals priced,
matching January’s total. We expect this above average trend in new
issuance to continue due to looming debt maturities.
Performance attribution
We underperformed the Merrill Lynch High Yield Cash Pay
Constrained Index for the month, primarily due to our overweight
positions to B and CCC rated issuers. (Which, as we indicated
above, underperformed during the month.)
Overall, security selection helped relative performance.
However, positive results from an overweight position in financials
and an underweight position in building materials were not enough
to offset the negative impact of our overweight positions to
gaming, B and CCC rated issues.
Disclaimers Regarding Fund Commentary - The Fund
Commentary is intended to assist shareholders in understanding how
the Fund performed during the month noted. Views and opinions were
current as of the date of this press release. They are not
guarantees of performance or investment results and should not be
taken as investment advice. Investment decisions reflect a variety
of factors, and the Fund and UBS Global AM reserve the right to
change views about individual securities, sectors and markets at
any time. As a result, the views expressed should not be relied
upon as a forecast of the Fund’s future investment intent.
Characteristics as of February 28, 2010*
Net Asset Value per share $2.10 Market Price per share $2.16
NAV Yield 11.14% Market Yield 10.83%
* Net asset value (NAV), market price and yields will fluctuate.
NAV yield is calculated by multiplying the current month’s dividend
by 12 and dividing by the month-end net asset value. Market yield
is calculated by multiplying the current month’s dividend by 12 and
dividing by the month-end market price.
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