DALLAS, March 13, 2020 — NexPoint Strategic Opportunities Fund (NYSE:NHF) (“NHF” or the “Fund”) today declared the regular monthly dividend on its common stock of $0.10 per share. The dividend will be payable on March 31, 2020 to shareholders of record at the close of business on March 24, 2020.
In conjunction with the dividend declaration, the Fund announced changes to the monthly dividend to better capture opportunities in the current market. The changes reduce the monthly dividend to $0.10 per share. This adjustment was approved by the Fund’s Board of Trustees (the “Board”) on March 5, 2020 and takes effect for the March 31 distribution.
The Fund’s manager, NexPoint Advisors, L.P. (the “Manager”), believes this change better reflects the current portfolio composition, as the Fund has moved into higher quality assets, increasing its allocation to more defensive real estate positions. While some of these investments have lower yields today, they are executing business plans built around a value-add approach, which can lead to greater income generation over the long term. Despite the Manager’s high conviction in these investments and their potential for income growth, they do not generate sufficient income in their current stages to sustain the prior dividend amount.
The dividend adjustment therefore brings the portfolio, investment strategy, and earnings rate of the Fund back into alignment to promote growth and drive long-term value.
The new monthly distribution of $0.10 per share has an indicated yield of 6.2% based on March 12, 2020 NAV price and an indicated yield of 9.1% based on March 12, 2020 market price.
The Manager believes the change still provides an attractive yield in the current rate environment; however, the decision was based on the benefit to shareholders that the Manager sees over the long term. The new dividend enables the Fund to maintain an emphasis on the private real estate assets where the Manager sees long-term potential for income generation and value appreciation.
These investments represent both the breadth and depth of the real estate capabilities on the NexPoint investment platform. In 2019, NexPoint completed over $5.2 billion in real estate transactions across multifamily, single-family rentals, office and retail, self-storage, and hospitality.1
About the NexPoint Strategic Opportunities Fund (NHF)
The NexPoint Strategic Opportunities Fund (NYSE:NHF) (“NHF”) is a closed-end fund managed by NexPoint Advisors, L.P. The fund invests primarily in below investment grade debt, equity securities, and real estate, and has the ability to hedge risk.
For more information visit www.nexpointadvisors.com/fund.
About NexPoint Advisors, L.P.
NexPoint Advisors, L.P. (“NexPoint Advisors”) is an SEC-registered adviser on the NexPoint alternative investment platform (“NexPoint”). NexPoint Advisors serves as the adviser to a suite of funds and investment vehicles, including a closed-end fund, interval fund, business development company (“BDC”), and various real estate vehicles.
For more information visit for www.nexpointadvisors.com/fund
Total operating expenses as of the most recent fund annual report are 2.14%. For most recent month-end performance, please visit www.nexpointadvisors.com/fund or call
Investors should consider the investment objectives, risks, charges and expenses of the NexPoint Strategic Opportunities Fund carefully before investing. This and other information can be found in the Fund’s prospectus, which may be obtained by calling
or visiting www.nexpointadvisors.com/fund/. Please read the prospectus carefully before you invest.
Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value. Past performance does not guarantee future results.
No assurance can be given that the Fund will achieve its investment objectives.
Closed-End Fund Risk. The Fund is a closed-end investment company designed primarily for long-term investors and not as a trading vehicle. No assurance can be given that a shareholder will be able to sell his or her shares on the NYSE when he or she chooses to do so, and no assurance can be given as to the price at which any such sale may be effected.
Credit Risk. Investments rated below investment grade are commonly referred to as high-yield, high risk or “junk debt.” They are regarded as predominantly speculative with respect to the issuing company’s continuing ability to meet principal and/or interest payments. Non-payment of scheduled interest and/or principal would result in a reduction of income to the Fund, a reduction in the value of the asset experiencing non-payment and a potential decrease in NAV of the Fund.
Interest Rate Risk. Interest rate risk is the risk that debt securities, and the Fund’s net assets, may decline in value because of changes in interest rates. Generally, fixed rate debt securities will decrease in value when interest rates rise and increase in value when interest rates decline.
Leverage Risk. The Fund uses leverage through borrowings from notes and a credit facility, and may also use leverage through the issuances of preferred shares. The use of leverage magnifies both the favorable and unfavorable effects of price movements in the investments made by the Fund. Insofar as the Fund employs leverage in its investment operations, the Fund will be subject to substantial risks of loss.
Industry Concentration Risk. The Fund must invest at least 25% of the value of its total assets at the time of purchase in securities of issuers conducting their principal business activities in the real estate industry. The Fund may be subject to greater market fluctuations than a fund that does not concentrate its investments in a particular industry. Financial, economic, business, and other developments affecting issuers in the real estate industry will have a greater effect on the Fund, and if securities of the real estate industry fall out of favor, the Fund could underperform, or its NAV may be more volatile than, funds that have greater industry diversification.
Illiquidity of Investments Risk. The investments made by the Fund may be illiquid, and consequently the Fund may not be able to sell such investments at prices that reflect the Investment Adviser’s assessment of their value or the amount originally paid for such investments by the Fund.
1 Real estate transactions between January 1, 2019 and December 31, 2019, inclusive of affiliates.
SOURCE NexPoint Advisors, L.P.