Neuberger High Yield Strategies Fund keeps its monthly payout — what investors need to know now

Monthly distribution declared and the key dates investors must mark

Neuberger Berman High Yield Strategies Fund (NHS) announced a monthly cash distribution of $0.0905 per share. The payment is scheduled for Jan. 30, with an ex-dividend/record date printed as Jan. 15. That means shareholders who hold NHS through the close before the ex‑date will be entitled to the payout; shares bought on or after the ex‑date will trade without the distribution attached.

How big is the payout in real terms — and how to think about yield

The $0.0905 figure is the per‑share amount for the month. Annualized, that works out to about $1.09 per share (0.0905 x 12). To convert that into a yield you can compare with other income vehicles, divide the $1.09 by either the fund’s market price or its NAV:

– Annualized payout = $0.0905 x 12 = $1.086.

– Example yields: if NHS traded at $10, the payout implies roughly a 10.9% annual yield; at $12 it implies about 9.1%; at $15 about 7.2%. Use whichever price (market or NAV) you prefer to judge whether the income suits your goals.

Expect a standard ex‑date price adjustment: on the ex‑dividend date the share price normally drops by roughly the distribution amount, all else equal, because new buyers no longer get that cash. For closed‑end funds like NHS, the change may differ from the raw payout because the fund can trade at a premium or discount to NAV. Rapid trading around the ex‑date can widen that premium/discount and create short‑term opportunities or losses for active traders.

Short‑term traders should also note that distributions can affect the reported NAV and the visible yield without changing the fund’s economic health. Buying right before a distribution and selling after can be costly once taxes and price adjustments are considered.

Where the money likely comes from — and the tax angle investors should watch

The manager’s press language usually describes whether a distribution is funded from net investment income, realized gains, or potentially a return of capital. Until the fund files its year‑end statements and a formal tax characterization, the final mix remains provisional. If the declaration follows past practice, the immediate notice will not give the full tax breakdown; expect a more detailed Section 19 informational notice and year‑end tax form that show how much is ordinary income, qualified income, capital gains, or return of capital.

Return of capital (ROC) is the item investors most need to watch. ROC reduces a shareholder’s cost basis and the fund’s NAV but does not necessarily mean the manager is doing anything wrong — it can reflect accounting timing or the use of realized principal to smooth payouts. However, persistent ROC to cover distributions can signal that the payout is not fully supported by income and may be less sustainable over time.

Who runs the fund and how the distribution fits fund policy

Neuberger Berman High Yield Strategies Fund (NHS) is a closed‑end vehicle managed by Neuberger Berman that focuses on U.S. and global high‑yield corporate debt. The fund typically uses leverage to boost income and follows a level‑distribution approach, meaning it aims to pay steady monthly cash to shareholders rather than vary payments with short‑term market swings.

That level policy can be attractive to income buyers but brings tradeoffs: leverage magnifies both income and losses, and managers sometimes use realized gains or ROC to keep the distribution steady in tougher markets. The firm’s announcement usually lists standard risk warnings — credit defaults, interest‑rate moves, and liquidity events — all of which can pressure NAV and payout sustainability if conditions worsen.

The market backdrop that matters for NHS’s payout now

High‑yield debt markets are sensitive to changes in interest rates, economic growth expectations, and corporate default trends. Three forces deserve attention: first, if short‑term rates or borrowing costs rise, the fund’s leverage becomes more expensive and can eat into distributable income. Second, rising defaults or spreads widen can reduce coupon income and capital values for lower‑rated corporate bonds. Third, market liquidity can dry up during stress, forcing managers to sell at unfavorable prices and potentially realize losses.

Put together, those pressures can make a steady monthly payout harder to sustain without dipping into capital. Conversely, if credit spreads compress and defaults remain low, the fund’s income engine will look healthier and the distribution becomes more comfortably covered.

Practical next steps for investors holding or watching NHS

• Watch NHS (NHS) on the ex‑date: expect the share price to adjust and the premium/discount to move.
• Check both market price and NAV to see how the annualized $1.086 payout translates into yield for you.
• Look out for a Section 19 informational notice and the year‑end tax statement that break the distribution into ordinary income, capital gains and any return of capital.
• Monitor leverage costs and high‑yield market signals — widening spreads or rising borrowing costs raise the risk the manager will need to use ROC or cut the distribution later.
• If you own shares for income, weigh the yield against the risk that part of the payout could be ROC and that NAV can fall; if you trade around the ex‑date, be aware of tax timing and price volatility.

The declared $0.0905 monthly distribution keeps NHS in the steady‑income camp closed‑end buyers seek, but the real test will be later disclosures and the health of the high‑yield market. For now, investors have clear dates and a tangible annualized payout to slot into their income plans — and a short checklist of signals to follow if they want to assess whether that income is durable.

Sources

• prnewswire.com