An Alternative Investment Fund by Highland Capital Management

From the article we gather that, Highland Floating Rate Fund announced the Regular Monthly Dividends on its common stock of zero point seventy seven dollar per share which will be payable to recorded shareholders, seven days after the close of business. The fund known as closed-end fund, majorly invests in floating rate loans with an objective of providing high levels of current income while consistently preserving capital in a registered fund format. The fund is managed by the Highland Capital Fund Advisors L.P. From the semi-annual fund report, the total operating expenses were said to be one point twenty six percent but then, current performance may not predict the future due to fluctuations in investment return and principal value and therefore, as an investor, it is necessary to have the advice of experts so as to understand the fluctuations and be ready to cope with any changes. Read this article at investopedia.com.

There are various prospects associated with the funds the investors should be aware before making decisions. First, the fund is a closed-end fund risk which only requires long term investors. Once investment has been placed and the shareholder desires to sell their shares, there is no guarantee price for the sale or that one will be able to make sell on the NYSE. Secondly is the Credit Risk. Assets in the fund may be invested in senior loans, high yield securities and unrated senior loans. Therefore, failure to pay for a scheduled interest or principal will lead to reduced income to the fund hence reduced value of the senior loan and decrease in NAV of the fund. It is therefore risky because, investment may lead great fluctuation compared to non-investments in the same. In addition, with senior loans, increase in interest leads to increased rate of borrowing leading to risk and default increase. Also, changes in short term interest rates may lead to an adjustment in floating rate loans.

View: https://www.bizjournals.com/dallas/news/2017/05/31/highland-capitals-nexpoint-fund-raises-269-million.html

In conclusion, if the investment made by the fund is illiquid, it may not fetch the original price; therefore it requires ongoing monitoring by agents who may have financial difficulties. Visit hcp.com to know more.

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