ACP: A Closed-End Fund with High Income Potential, but Unsustainable Distribution a Concern

The abrdn Income Credit Strategies Fund (ACP) is a closed-end fund that provides income-oriented investors with a method to achieve their income goals and earn a high level of income. ACP has a unique distribution policy, which is unsustainable and poses a real problem for investors. Despite this, the fund has a strong track record and is considered a viable option for income-oriented investors.

Title: abrdn Income Credit Strategies Fund (ACP) Declares Quarterly Dividend

The abrdn Income Credit Strategies Fund (ACP), a closed-end fund managed by Aberdeen Investments, has declared a cash distribution of $0.328125 per share for its 5.250% Series A Perpetual Preferred Shares. The distribution, payable on June 30, 2025, will be issued to shareholders of record on June 20, 2025, with an ex-dividend date of June 20, 2025 [1].

The Series A Preferred Shares, trading under the symbol "ACP PRA" on the NYSE, are rated "A2" by Moody's Investors Service and have an annual dividend rate of $1.3125 per share. These shares were issued on May 10, 2021, at $25.00 per share and pay distributions quarterly. The distributions may come from various sources of income, including net realized short-term and long-term capital gains, and return of capital, depending on the Fund's investment experience during the remainder of its fiscal year [1].

The actual amounts and sources of the distributions for tax reporting purposes will be detailed in a Form 1099-DIV sent to shareholders in January 2026. Investors should not draw any conclusions about the Fund's investment performance from the amount of this distribution [1].

The Fund's investment objective is to seek a high level of current income with a secondary objective of capital appreciation. It invests primarily in debt and loan instruments across various industries and geographic regions, including consumer discretionary, materials, energy, financials, health care, capital goods, telecommunication services, and information technology. The Fund may also invest in credit obligations that are rated below investment grade [2, 4].

Despite the Fund's strong track record and potential for high income, investors should be aware of its unique distribution policy, which may pose a real problem. Closed-end funds like ACP are traded on the secondary market and their shares may trade above or below the net asset value (NAV) of the fund's portfolio. There is no assurance that the Fund will achieve its investment objective, and past performance does not guarantee future results [3].

Indians can invest in the Abrdn Income Credit Strategies Fund (ACP) from India through platforms like INDmoney, which offers zero brokerage for US stocks. The Fund's share price today stands at $5.53, with a 52-week high of $7.03 and a 52-week low of $4.92 [3].

References
[1] https://finance.yahoo.com/news/abrdn-income-credit-strategies-fund-201700924.html
[2] https://markets.ft.com/data/equities/tearsheet/summary?s=ACP:NYQ
[3] https://www.indmoney.com/us-stocks/abrdn-income-credit-strategies-fund-share-price-acp
[4] https://www.marketscreener.com/quote/stock/ABRDN-INCOME-CREDIT-STRAT-56649891/