Western Asset Mortgage Opportunity Fund Inc. (DMO)

DMO offers a high yield and a differentiated mortgage-focused portfolio, but distribution coverage has weakened. The fund's previous deep discount has disappeared, making it fairly valued and removing a reason why it could be considered appealing previously. On a brighter note, the fund is one of the best in terms of total returns over the long run in its peer group.

DMO offers a compelling 13.45% yield, far outpacing major bond indices, and most peers, but primarily invests in lower-quality, below-investment-grade mortgages. The fund's high leverage amplifies both returns and volatility; while total returns outperformed indices, net asset value, and share price have declined over time. Commercial mortgages remain troubled, and this could weigh on the fund's net asset value for the next few years.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

Mortgage securities' diversification benefits and potential for higher yields with reduced volatility make them an attractive option for income-oriented investors. Discover Western Asset Management's unique approach to the strategy with the Western Asset Mortgage Opportunities Fund (DMO). Greg Handler, Portfolio Manager and Head of Mortgage and Consumer Credit with Western Asset Management shares outlook for the 2025 fixed income sector and more.

Invesco S&P International Developed Momentum ETF holds 183 international stocks with high momentum. The IDMO ETF is overweight in financials, quite heavy in Japan, and has fundamental growth characteristics. IDMO has outperformed other momentum ETFs in the same stock universe over the last seven years.

Western Asset Mortgage Opportunity Fund has outperformed since its initial "Buy" rating. The fund has reached fair value, and future returns will primarily come from dividends. DMO remains focused on non-agency RMBS bonds and GSE risk transfer securities, which carry credit risk.

We review CEF market valuation and performance through the first week of July and highlight recent market action. All CEF sectors finished the week in the green, with fixed-income CEF sector discounts now expensive and equity CEF sector discounts somewhat cheap. Saba and BlackRock came out with differing press releases on the latest proxy votes over board membership and termination of CEFs.

We review CEF market valuation and performance through the last week of June and highlight recent market action. CEFs were mostly up on the week with MLP and Hybrid sectors leading the way. Western Asset Global Corporate Defined Opportunity Fund holding a tender offer for all shares at NAV, following Nuveen's approach.

Western Asset Mortgage Opportunity Fund has increased its distribution for the fourth consecutive time. DMO primarily allocates to non-agency residential mortgages, with a smaller holding in commercial mortgages. The fund's net income has been steadily rising, driven by floating-rate holdings and increased borrowings.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

Western Asset Mortgage Opportunity Fund Inc. (NYSE:DMO – Get Free Report) declared a monthly dividend on Thursday, February 22nd, Wall Street Journal reports. Shareholders of record on Thursday, May 23rd will be given a dividend of 0.125 per share by the investment management company on Monday, June 3rd. This represents a $1.50 annualized dividend and a yield of 12.89%. The ex-dividend date of this dividend is Wednesday, May 22nd. Western Asset Mortgage Opportunity Fund has increased its dividend by an average of 6.2% per year over the last three years and has increased its dividend every year for the last 2 years. Western Asset Mortgage Opportunity Fund Price Performance Western Asset Mortgage Opportunity Fund stock opened at $11.64 on Monday. The company’s 50-day moving average is $11.57 and its 200 day moving average is $11.26. Western Asset Mortgage Opportunity Fund has a 1-year low of $10.00 and a 1-year high of $11.93. About Western Asset Mortgage Opportunity Fund (Get Free Report) Western Asset Mortgage Opportunity Fund Inc is a closed ended fixed income mutual fund launched and managed by Legg Mason Partners Fund Advisor, LLC. The fund is co-managed Western Asset Management Company and Western Asset Management Company Limited. It invests in the fixed income markets of the United States. See Also Five stocks we like better than Western Asset Mortgage Opportunity Fund Learn Technical Analysis Skills to Master the Stock Market JD’s Earnings Could Mean Chinese Stocks Making a Comeback What is a Stock Market Index and How Do You Use Them? Canada Goose Flies Higher Driven By DTC Growth What Are Dividend Contenders? Investing in Dividend Contenders CVS Health Stock Has a Silver Lining Called Value

We review CEF market valuation and performance through the fourth week of April and highlight recent market action. CEFs were mostly up on the week, however remain in the red through the month. Investors should evaluate funds based on historic total NAV return and individual features, rather than price behavior.

NEW YORK--(BUSINESS WIRE)--Effective March 1, 2024, the named portfolio management team responsible for the day-to-day oversight of the Fund is as follows:

Western Asset Mortgage Opportunity Fund Inc. is a fixed income CEF focused on mortgage bonds that offers a supported 12% yield. DMO pursues a different strategy than most mortgage funds by purchasing junior and subordinated tranches of MBS bonds, taking true credit risk. The housing market is currently 'stuck' rather than experiencing a collapse, which is favorable for DMO's collateral.

For the first month in three, equity CEFs (-0.59% on a NAV basis) suffered losses while their fixed-income CEF (+0.49%) counterparts on average posted plus-side returns. At month-end, 11% of all CEFs traded at a premium to their NAV, with 12% of equity CEFs and 10% of fixed-income CEFs trading in premium territory. Income & Preferred Stock CEFs (+1.44%), for the first month in four, outpaced the other classifications in the equity CEF universe for January.

Key Decision Factors For CEF Allocation In Today's Market