Western Asset Global High Income Fund: A Comprehensive Analysis

Western Asset Global High Income Fund Inc. (NYSE:EHI) is a high-yield closed-end fund that invests in a diversified portfolio of income-generating securities, including corporate bonds and debt securities. EHI aims to generate a high level of income for its shareholders, while preserving capital. With a focus on credit quality and risk management, the fund aims to provide investors with a stable source of income in a rising interest rate environment.

Western Asset Global High Income Fund Inc. (NYSE:EHI) is a high-yield closed-end fund that invests in a diversified portfolio of income-generating securities, including corporate bonds and debt securities. The fund aims to generate a high level of income for its shareholders while preserving capital, making it an attractive option for investors seeking stable monthly income.

Launched on July 28, 2003, EHI has a total asset value of approximately $289.77 million and total net assets of $205 million, with a market capitalization of around $200 million [1]. The fund holds 403 securities, with an average maturity of 8.88 years and an effective duration of 4.98 years, indicating moderate sensitivity to interest rate changes. The fund's top three holdings are Aercap Ireland CAP, Venture Global LNG, and First Quantum Minerals, suggesting investments in high-yielding but high-risk sectors such as aviation, energy, and mining [1].

EHI's distribution rate on NAV is 12.33%, with shareholders receiving a $0.84 yearly dividend in the form of $0.0700 monthly distributions [1]. The fund is currently trading at a 3.08% discount to its NAV of $6.81, with a one-year Z-score of 0.53 and a three-year Z-score of 0.44, indicating a positive performance trajectory [1]. However, the fund's total leverage of 29.24% and expense ratio of 4.14% highlight significant operating and leverage costs that investors should consider [1].

Comparing EHI with the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), EHI has outperformed HYG in the 3-year and 6-month total return comparisons, but HYG has outperformed EHI in the 5-year total return comparison [1]. Despite this, EHI's 10-year total return remains higher than HYG's, indicating a strong long-term performance [1].

EHI is rated BB in credit quality, suggesting a moderate level of credit risk [1]. The fund's maturity breakdown reflects its long-term investment strategy, with an average maturity of 8.88 years [1]. While EHI offers a high yield and trading at a discount to NAV, investors should be aware of its high expenses and credit risk. In an adverse economic scenario, credit risks could significantly impact the portfolio.

In conclusion, Western Asset Global High Income Fund Inc. (NYSE:EHI) is an income-oriented fund with medium to high risk, suitable for investors with an appetite for high yield and a willingness to accept volatility and credit risk. It is best suited as part of a diversified portfolio, rather than a core position.

References:
[1] https://seekingalpha.com/article/4813986-ehi-high-yield-closed-end-funds-part-3