Abrdn Income Credit Strategies Fund flagged as sell due to unsustainable yields and NAV erosion risks.

The Abrdn Income Credit Strategies Fund (ACP) is recommended as a sell because it faces ongoing earnings shortfalls and net asset value (NAV) erosion. Its high 17.9% yield is unsustainable, with 42% of distributions funded by return of capital, indicating likely future payout cuts. The fund's significant leverage of 32.08% and heavy exposure to below-investment-grade debt increase its risk amid a tough credit market. With net investment income consistently below distributions and potential interest rate rises, further declines in ACP's NAV and share price are expected.