Brookfield Mortgage Opportunity Fund (NYSE:BOI) – High Yielding Play on Real Estate Recovery
Brookfield Mortgage Opportunity Fund is a relatively new fixed income (FI) closed end fund (CEF) that invests in commercial and residential mortgages. This fund has been discussed briefly in a prior note; this is a deeper dive into the risk-reward tradeoff. Like many bargains in FI CEF space, this was launched just before 2013′s early summer bond selloff and shares continue to change hands at a considerable discount — despite steady growth in NAV since launch. Management has added value over passive indexing, beyond leverage. The discount to NAV combined with a high dividend yield that is likely covered by earnings present a solid entry point for investors seeking a low volatility taxable fund, with some ability to weather rising rates.
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The fund’s advisor, Brookfield Investment Management, is a