Managed High Yield Plus Fund Inc. (the "Fund") (NYSE: HYF), a closed-end management investment company, today announced that the Fund's Board of Directors has declared a dividend from net investment income of $0.0195 per share. The dividend is payable on February 26, 2010 to shareholders of record as of February 18, 2010. The ex-dividend date is February 16, 2010. Managed High Yield Plus Fund Inc. seeks high income and, secondarily, capital appreciation, primarily through investments in lower-rated, income producing debt and related equity securities.
Fund Commentary for the month of January 2010 from UBS Global Asset Management (Americas) Inc. ("UBS Global AM"), the Fund's investment advisor
While the US high yield market returned 1.52% as measured by the Merrill Lynch US High Yield Cash Pay Constrained Index (the "Index"), January 2010 can be segmented into two: there was considerable strength in the market in the first half, and weakness in the second half. After peaking on January 18, 2010 with a 2.26% return for the Index, the market lost 0.77% in the second half of the month, as concerns surrounding corporate earnings, Greek sovereign debt risk and the tightening of Chinese monetary policy set in. The latter two events, one which could threaten the stability of the European economy, and the other, which could remove a growth engine of the world economy, weighed on investors.
As with previous months, even with the weakness experienced in the latter half of the month, CCC rated securities outperformed BB and B rated securities. Biggest sector outperformers for the month were gaming, financials and insurance, while food/drug retail and telecommunications underperformed. The default rate for high yield securities peaked at 10.3% at the end of 2009; by the end of January, the rolling last-twelve-month default rate had declined to 8.1% (as measured by JP Morgan).
Performance attribution
The Fund underperformed the Index for the month. While our sector selection helped performance—with overweights to gaming and publishing—security selection detracted from relative performance. Our bias toward the larger, more liquid issues hurt relative performance as these were sold aggressively as the market weakened during the second half of January.
Disclaimers Regarding Fund Commentary - The Fund Commentary is intended to assist shareholders in understanding how the Fund performed during the month noted.Views and opinions were current as of the date of this press release.They are not guarantees of performance or investment results and should not be taken as investment advice.Investment decisions reflect a variety of factors, and the Fund and UBS Global AM reserve the right to change views about individual securities, sectors and markets at any time.As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent.
Characteristics as of January 31, 2010* | ||
 |  | |
Net Asset Value per share | $2.11 | |
Market Price per share | $2.20 | Â |
NAV Yield | 11.09 | % |
Market Yield | 10.64 | % |
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* Net asset value (NAV), market price and yields will fluctuate. NAV yield is calculated by multiplying the current month's dividend by 12 and dividing by the month-end net asset value. Market yield is calculated by multiplying the current month's dividend by 12 and dividing by the month-end market price. |
Contacts:
UBS Global Asset Management Closed-End Funds Desk, 888-793-8637