ARDC: 2 Possible Outcomes For This CEF In 2025 (Downgrade)
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Ares Dynamic Credit Allocation Fund (ARDC) offers a high dividend yield but is risky due to its exposure to below investment grade debt and reliance on interest rate movements. The fund's leverage increases both potential returns and risks, especially if interest rates remain high.
January 11, 2025 | 7:45 am
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Ares Dynamic Credit Allocation Fund (ARDC) offers a 9.2% dividend yield but is risky due to its exposure to below investment grade debt and reliance on interest rate movements. The fund's leverage increases both potential returns and risks, especially if interest rates remain high.
The article highlights the high risk associated with ARDC due to its exposure to below investment grade debt and the impact of interest rate movements. The use of leverage further increases the risk, especially in a high-interest-rate environment, which could negatively impact the fund's performance.
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