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BrandywineGLOBAL: A Reasonable Alternative to FCO Amidst Absurd Premium
ByAinvest
Monday, Jul 7, 2025 10:14 am ET1min read
BrandywineGLOBAL - Global Income Opportunities Fund (NYSE:BWG) is a reasonable alternative to abrdn Global Income Fund due to its absurd premium. BWG offers a better investment opportunity for those seeking a global income-focused fund.
BrandywineGLOBAL - Global Income Opportunities Fund (NYSE:BWG) has emerged as a viable alternative to the abrdn Global Income Fund (NYSE:FCO) due to the latter's absurd premium. Investors seeking a global income-focused fund should consider BWG as a more attractive option.BWG offers a discounted premium, making it a more reasonable investment compared to FCO. The fund's 1-Year Z-score of 0.69 indicates a stable valuation, while FCO's premium has skyrocketed to 105.68% [2]. This premium has resulted in FCO outperforming BWG on a total share price return basis, despite BWG's NAV providing better results [2].
BWG's investment objective is to provide current income, with a secondary objective of capital appreciation. The fund invests at least 80% of its assets in global fixed income securities, including sovereign debt, corporate debt, mortgage-backed securities, and currency exposure [2]. This diversified approach offers investors a leveraged global portfolio.
FCO, on the other hand, has a higher distribution yield of 12.88% compared to BWG's 11.39%. However, FCO's absurd premium makes its distribution rate unsustainable. The fund needs to generate returns more than twice what shareholders are receiving just to sustain the distribution [2]. This high premium has led to a rapid decline in FCO's NAV, making it a risky holding.
BWG's NAV distribution rate, while not as high as FCO's, is more sustainable. The fund's NAV has declined at a slower pace than FCO, and it is not richly valued. This relative positioning makes BWG a better alternative for investors seeking a global income-focused fund.
In conclusion, BrandywineGLOBAL - Global Income Opportunities Fund (NYSE:BWG) is a reasonable alternative to abrdn Global Income Fund (NYSE:FCO) due to its more attractive valuation and sustainable distribution rate. Investors should consider BWG as a viable option for their global income-focused investment needs.
References:
[1] https://finance.yahoo.com/quote/GLO/
[2] https://seekingalpha.com/article/4799658-bwg-and-fco-gets-to-absurd-premium-making-bwg-reasonable-alternative
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