We have 20 stocks and bond funds in our Contrarian Income Report portfolio, yielding nearly 8.1% as I write. That said, not all current positions are equally attractive destinations for new money. Some are buys — even best buys — but some are holds. One of the top names is AllianceBernstein Global High Income Fund (AWF), notes Brett Owens, editor of Contrarian Income Report.
AWF is the “lone survivor” of our one-time proud group of emerging market bond plays. We sold these funds when the US dollar gained strength. This coincided with a substantial rise in rates (Higher interest rates tend to be bullish for the currency of the country where rates are being hiked).
Thus, a strong buck was a double whammy for emerging bonds. Sure, in practice they attempt to hedge currency risk. In reality, it’s best to buy them when the dollar is heading flat to lower.
With the Federal Reserve just about done raising rates, the dollar should continue easing in the months ahead. Of course, it will happen in fits and starts. But I recommend you buy the fits in the months ahead because AWF offers high income potential in emerging market, high-yield bonds.
Recommended Action: Buy AWF
