Aug. 28, 2025 2:10 AM ETWestern Asset High Yield Opportunity Fund Inc (HYI)AGG, JNK, BNDW, BNDX, EMB, SP500TR, HIX, AWF, EAD, DHF, HYT, DHY, EIC, VLT, CIF, NHS, ISD, PHT, EICC, EICB, EICA, VTABX, VTIBX, VTIFX, HYIPower HedgeInvesting Group LeaderWestern Asset High Yield Opportunity Fund offers a high 9.52% yield but struggles to fully cover its distribution from net investment income and realized gains.The fund's net asset value has been declining, raising concerns about long-term distribution sustainability despite recent outperformance versus bond indices on a total return basis.Bonds could struggle to deliver attractive returns if the Fed cuts interest rates further.Current valuation is less attractive, trading at a smaller discount than its historical average and peers, making it relatively expensive right now.Given the fund's strained coverage, expensive valuation, and challenging bond market outlook, I do not recommend purchasing HYI at this time.Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More »We Are/DigitalVision via Getty ImagesThe Western Asset High Yield Opportunity Fund (NYSE:HYI) is a closed-end fund that aims to provide its investors with a very high level of current income. This is an interesting proposition for many individuals, particularlyAt Energy Profits in Dividends, we seek to generate a 7%+ income yield by investing in a portfolio of energy stocks while minimizing our risk of principal loss. By subscribing, you will get access to our best ideas earlier than they are released to the general public (and many of them are not released at all) as well as far more in-depth research than we make available to everybody. In addition, all subscribers can read any of my work without a subscription to Seeking Alpha Premium!We are currently offering a two-week free trial for the service, so check us out!This article was written byPower Hedge15.75K FollowersPower Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.CommentsRecommended For You