As filed with the Securities and Exchange Commission on July 6, 2017

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-22396

 

(Exact Name of Registrant as specified in charter)

c/o Neuberger Berman Investment Advisers LLC

1290 Avenue of the Americas

New York, New York 10104-0002

(Address of Principal Executive Offices – Zip Code)

 

Registrant’s telephone number, including area code: (212) 476-8800

 

Robert Conti

Chief Executive Officer and President

Neuberger Berman High Yield Strategies Fund Inc.

c/o Neuberger Berman Investment Advisers LLC

1290 Avenue of the Americas
New York, New York 10104-0002

 

Arthur C. Delibert, Esq.

K&L Gates LLP

1601 K Street, N.W.

Washington, D.C. 20006-1600

(Names and Addresses of agents for service)

 

Date of fiscal year end: October 31

 

Date of reporting period: April 30, 2017

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940, as amended (“Act”) (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the

Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Report to Stockholders.

 

Following is a copy of the semi-annual report transmitted to stockholders pursuant to Rule 30e-1 under the Act.

 

				Neuberger Berman High Yield Strategies Fund Inc.
				Semi-Annual Report
				April 30, 2017

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				Contents
				PRESIDENT’S LETTER		1
				PORTFOLIO COMMENTARY		2
				SCHEDULE OF INVESTMENTS		6
				FINANCIAL STATEMENTS		23
				FINANCIAL HIGHLIGHTS/PER SHARE DATA		36
				Distribution Reinvestment Plan		39
				Directory		42
				Proxy Voting Policies and Procedures		43
				Quarterly Portfolio Schedule		43
				Privacy Notice	Located after the Funds’ Report

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Dear Stockholder,

I am pleased to present the annual report for Neuberger Berman High Yield Strategies Fund Inc. (the “Fund”) for the six months ended April 30, 2017. The report includes a portfolio commentary, a listing of the Fund’s investments and its unaudited financial statements for the reporting period.

The Fund seeks high total return (income plus capital appreciation). To pursue that objective, we have assembled a portfolio that consists primarily of high yield debt securities.

On March 31, 2017, the Fund announced a decrease in its monthly distribution rate to $0.0725 per share of common stock from the prior monthly distribution rate of $0.08 per share. The Fund’s decrease in distribution rate was the result of numerous factors, including the decline in the absolute level of yields available in the high yield market, the degree of credit spread tightening that had occurred in the high yield market, the increase in the Fund’s cost of leverage and the resultant overall reduction in the level of income generated by the Fund relative to its current distribution amount.

Thank you for your confidence in the Fund. We will do our best to continue earning your trust in the years to come.

Sincerely,

Robert Conti
President and CEO
Neuberger Berman High Yield Strategies Fund Inc.

1

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Neuberger Berman High Yield Strategies Fund Inc. generated a 6.76% total return on a net asset value (NAV) basis for the six months ended April 30, 2017 and outperformed its benchmark, the BofA Merrill Lynch U.S. High Yield Master II Constrained Index, which provided a 5.49% return for the same period. (Fund performance on a market basis is provided in the table immediately following this letter.) The use of leverage (typically a performance enhancer in up markets and a detractor during market retreats) contributed to performance during the reporting period.

Despite periods of volatility, the high yield market generated solid results during the reporting period. After a weak start in November 2016, the high yield market rallied over the next three months, as investor demand was strong, oil prices stabilized and there were expectations for improving economic growth under the Trump administration. After a modest setback in March 2017, the market ended the reporting period on a positive note as first quarter profit results were generally better than anticipated. Within the benchmark, securities rated CCC or lower (relatively low ratings) and securities rated BB (a higher rating) returned 10.14% and 3.87%, respectively.¹

From a sector perspective, security selection within health care, support services and diversified financial services detracted the most from performance. In contrast, security selection within gaming and telecommunications, as well as an underweight to super retail (non-food & drug retailers), contributed the most to performance.

In terms of the Fund’s quality biases, security selection within BB and B rated securities was negative for performance, as was our underweight to CCC rated securities.

We made several adjustments to the portfolio during the reporting period. The Fund’s allocation to BBB and BB rated securities was reduced. We increased our allocation to B rated bonds, reducing our underweight to about 1% from 5%. From a sector perspective, the Fund slightly increased its allocation to higher quality energy and metals/mining securities, while reducing its health care exposure.

The Fund’s use of swap contracts contributed to performance during the reporting period.

We continue to believe that the high yield market is compensating investors for default risk. While U.S. economic activity decelerated during the first quarter of 2017, we anticipate continued, albeit relatively modest, growth as the year progresses. Turning to the U.S. Federal Reserve, while it raised rates in December 2016 and March 2017, we believe it will take a measured approach in terms of further rate hikes. In our view, high yield defaults peaked in 2016 and will remain below historical averages (approximately 3.1% according to JPMorgan) in 2017 if, as we expect, U.S. economic growth improves. Finally, we feel there could be periods of increased volatility as the year progresses, possibly driven by uncertainties regarding future fiscal and monetary policy, global economic growth and geopolitical developments.

Sincerely,

Thomas P. O’Reilly, Russ Covode, Daniel Doyle and Patrick Flynn
Portfolio Co-Managers

The portfolio composition, industries and holdings of the Fund are subject to change without notice.

The opinions expressed are those of the Fund’s portfolio managers. The opinions are as of the date of this report and are subject to change without notice.

The value of securities owned by the Fund, as well as the market value of shares of the Fund’s common stock, may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional, national or global political, social or economic instability; regulatory or legislative developments; price, currency and interest rate fluctuations, including those resulting from changes in central bank policies; and changes in investor sentiment.

¹ The performance of certain rated bonds within the benchmark, as noted above, represent issues that are rated Ba1/BB+ through Ba3/BB- and CCC+/Caa1 or lower, based on an average of Moody’s, S&P and Fitch, as calculated by BofA Merrill Lynch.

2

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3

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1		The performance information for periods prior to August 6, 2010 is that of Neuberger Berman High Yield Strategies Fund, a predecessor to the Fund.
2		Returns based on the NAV of the Fund.
3		Returns based on the market price of shares of the Fund’s common stock on the NYSE MKT.
4		Please see “Description of Index” on page 5 for a description of the index.

For more complete information on Neuberger Berman High Yield Strategies Fund Inc., call Neuberger Berman Investment Advisers LLC at (800) 877-9700, or visit our website at www.nb.com.

4

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BofA Merrill Lynch U.S. High Yield Master II Constrained Index:

The index tracks the performance of U.S. dollar-denominated, below investment grade corporate debt publicly issued in the U.S. domestic market. In addition to meeting other criteria, qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch ratings), and have risk exposure to countries that are members of the FX-G10, Western Europe or territories of the U.S. and Western Europe. Securities in legal default are excluded from the index. Index constituents are capitalization-weighted, provided the total allocation to an individual issuer does not exceed 2%.

Please note that the index does not take into account any fees and expenses or any tax consequences of investing in the individual securities that it tracks and that individuals cannot invest directly in any index. Data about the performance of this index are prepared or obtained by Management and include reinvestment of all income dividends and other distributions, if any. The Fund may invest in securities not included in the above described index and generally does not invest in all securities included in the index.

5

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PRINCIPAL AMOUNT				VALUE
Loan Assignments(a) 8.9%
All Telecom 0.6%
$	405,000		Level 3 Financing, Inc., First Lien Term Loan B, 3.24%, due 2/22/24	$	406,158
			Syniverse Technologies
	594,278		First Lien Term Loan, 4.15%, due 4/23/19		543,206
	677,582		First Lien Term Loan, 4.15%, due 4/23/19		621,682
					1,571,046
Business Equipment & Services 1.7%
	1,834,866		Advantage Sales and Marketing, Second Lien Term Loan, 7.50%, due 7/25/22		1,745,875
	1,212,839		First Data Corporation, First Lien Term Loan, 3.99%, due 7/10/22		1,219,207
	804,860		Presidio, First Lien Term Loan, 4.40%, due 2/2/22		813,665
	773,063		Servicemaster Company, First Lien Term Loan B, 3.48%, due 11/8/23		781,280
					4,560,027
Cable & Satellite Television 0.2%
	448,662		Cablevision Systems Corp., First Lien Term Loan B, 3.24%, due 7/17/25		448,262
Conglomerates 0.2%
	540,000		Harland Clark Holdings Corp., First Lien Term Loan B6, 6.65%, due 2/3/22		540,675
Containers & Glass Products 0.6%
	1,585,629		Reynolds Group, First Lien Term Loan, 3.99%, due 2/5/23		1,593,462
Drugs 0.1%
	411,467		Pharmaceutical Product Development, Inc., First Lien Term Loan B, 4.33%, due 8/18/22		413,524
Electronics - Electrical 0.2%
	577,988		Rackspace Hosting Inc., First Lien Term Loan B, 4.53%, due 11/3/23		581,964
Equipment Leasing 0.4%
	975,000		Avolon, First Lien Term Loan B2, 3.74%, due 3/20/22		989,196
Food & Drug Retailers 0.2%
	599,662		General Nutrition Centers, First Lien Term Loan, 3.50%, due 3/4/19		551,942
Health Care 0.9%
	733,163		Envision Healthcare, First Lien Term Loan B, 4.15%, due 12/1/23		739,944
	401,779		Multiplan, Inc., First Lien Term Loan B, 4.90%, due 6/7/23		406,874
	1,140,000		Team Health, Inc., First Lien Term Loan B, 3.75%, due 2/6/24		1,129,318
					2,276,136
Leisure Goods - Activities - Movies 0.2%
	462,455		Match Group Inc., First Lien Term Loan B, 4.28%, due 11/16/22		467,658

See Notes to Financial Statements

6

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PRINCIPAL AMOUNT					VALUE
Lodging & Casinos 2.0%
$	2,540,000		Cowlitz Tribal Gaming, First Lien Term Loan B, 11.50%, due 12/6/21		$	2,794,000	(b)
	621,879		Extended Stay, First Lien Term Loan B, 3.49%, due 8/30/23			624,727
	849,600		Hilton Worldwide, First Lien Term Loan B2, 2.99%, due 10/25/23			856,549
	425,700		MGM Growth Properties, First Lien Term Loan B, 3.49%, due 4/25/23			426,462
	631,541		MTR Gaming Group, First Lien Term Loan B, 6.25%, due 7/23/22			628,781
						5,330,519
Radio & Television 0.4%
	305,350		Sinclair Broadcasting, First Lien Term Loan B2, 3.25%, due 1/3/24			305,732
	770,871		Univision Communications Inc., First Lien Term Loan C5, 3.75%, due 3/15/24			765,452
						1,071,184
Retailers (except food & drug) 0.8%
			Bass Pro Shops
	403,014		First Lien Term Loan B1, 4.24%, due 6/5/20			402,175
	853,636		First Lien Term Loan B, 6.15%, due 12/16/23			830,639
	785,000		BJS Wholesale Club Inc., First Lien Term Loan B, 4.75%, due 1/27/24			781,405	(c)(d)
						2,014,219
Utilities 0.4%
	771,404		Calpine Corp., First Lien Term Loan B6, 3.90%, due 1/15/23			773,818
	254,363		Texas Competitive, First Lien Term Loan B2, 4.25%, due 8/4/24			255,159
						1,028,977
Total Loan Assignments (Cost $23,104,858)						23,438,791
Corporate Bonds 133.8%
Advertising 1.7%
	290,000		Lamar Media Corp., 5.75%, due 2/1/26			315,737
	940,000		MDC Partners, Inc., 6.50%, due 5/1/24			916,500	(e)
	3,010,000		Nielsen Finance LLC, 5.00%, due 4/15/22			3,098,419	(e)
						4,330,656
Auto Parts & Equipment 0.4%
	585,000		IHO Verwaltungs GmbH, 4.50% Cash/5.25% PIK, due 9/15/23			584,269	(e)(f)
	540,000		ZF N.A. Capital, Inc., 4.00%, due 4/29/20			562,275	(e)
						1,146,544
Banking 4.0%
			Ally Financial, Inc.
	1,530,000		3.60%, due 5/21/18			1,549,278
	3,115,000		8.00%, due 3/15/20			3,516,056	(g)

See Notes to Financial Statements

7

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PRINCIPAL AMOUNT					VALUE
			CIT Group, Inc.
$	795,000		5.25%, due 3/15/18		$	820,281
	1,830,000		6.63%, due 4/1/18			1,913,265	(e)
	2,645,000		5.00%, due 5/15/18			2,660,605	(e)
	122,000		5.50%, due 2/15/19			128,863	(e)
						10,588,348
Building & Construction 2.4%
	445,000		CalAtlantic Group, Inc., 5.25%, due 6/1/26			454,456
			Lennar Corp.
	1,140,000		4.75%, due 12/15/17			1,149,975
	1,415,000		4.75%, due 11/15/22			1,469,831
	275,000		4.88%, due 12/15/23			284,625
	445,000		Meritage Homes Corp., 6.00%, due 6/1/25			474,148
	570,000		Ryland Group, Inc., 5.38%, due 10/1/22			608,475
	490,000		Standard Pacific Corp., 8.38%, due 1/15/21			575,750
	735,000		Taylor Morrison Communities, Inc./Taylor Morrison Holdings II, Inc., 5.63%, due 3/1/24			777,263	(e)
			Toll Brothers Finance Corp.
	260,000		4.00%, due 12/31/18			267,150
	290,000		4.38%, due 4/15/23			296,525
						6,358,198
Building Materials 1.8%
	340,000		Allegion PLC, 5.88%, due 9/15/23			362,950
			HD Supply, Inc.
	1,325,000		5.25%, due 12/15/21			1,397,875	(e)
	440,000		5.75%, due 4/15/24			467,500	(e)
			USG Corp.
	1,990,000		8.25%, due 1/15/18			2,087,013
	435,000		5.50%, due 3/1/25			456,750	(e)
						4,772,088
Cable & Satellite Television 11.5%
			Altice Luxembourg SA
	1,155,000		7.75%, due 5/15/22			1,227,187	(e)
	810,000		7.63%, due 2/15/25			864,675	(e)
	700,000		Altice US Finance I Corp., 5.50%, due 5/15/26			723,625	(e)
			CCO Holdings LLC/CCO Holdings Capital Corp.
	1,460,000		5.25%, due 9/30/22			1,514,750
	1,480,000		5.13%, due 5/1/23			1,544,750	(e)
	1,850,000		5.75%, due 2/15/26			1,965,033	(e)
	350,000		5.13%, due 5/1/27			357,000	(e)
	1,080,000		5.88%, due 5/1/27			1,148,850	(e)
			Cequel Communications Holdings I LLC/Cequel Capital Corp.
	841,000		6.38%, due 9/15/20			866,760	(e)
	1,614,000		5.13%, due 12/15/21			1,650,315	(e)

See Notes to Financial Statements

8

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PRINCIPAL AMOUNT					VALUE
			CSC Holdings LLC
$	2,215,000		10.88%, due 10/15/25		$	2,660,769	(e)
	385,000		5.50%, due 4/15/27			397,994	(e)
	845,000		CSC Holdings, Inc., 7.63%, due 7/15/18			894,644
			DISH DBS Corp.
	705,000		6.75%, due 6/1/21			766,688
	1,475,000		5.88%, due 11/15/24			1,546,906
	530,000		7.75%, due 7/1/26			620,763
			Numericable-SFR SA
	4,160,000		6.00%, due 5/15/22			4,336,800	(e)
	2,435,000		7.38%, due 5/1/26			2,562,837	(e)
	380,000		UPCB Finance IV Ltd., 5.38%, due 1/15/25			386,650	(e)
	1,270,000		Virgin Media Secured Finance PLC, 5.50%, due 8/15/26			1,296,987	(e)
	1,380,000		WideOpenWest Finance LLC/WideOpenWest Capital Corp., 10.25%, due 7/15/19			1,436,925
	1,425,000		Ziggo Secured Finance B.V., 5.50%, due 1/15/27			1,464,187	(e)
						30,235,095
Chemicals 0.9%
	495,000		CF Industries, Inc., 5.38%, due 3/15/44			431,269
			Momentive Performance Materials, Inc.
	420,000		8.88%, due 10/15/20			42	(b)(h)(i)
	420,000		3.88%, due 10/24/21			417,375
	1,100,000		NOVA Chemicals Corp., 5.00%, due 5/1/25			1,126,125	(e)
			WR Grace & Co-Conn
	180,000		5.13%, due 10/1/21			193,275	(e)
	180,000		5.63%, due 10/1/24			195,300	(e)
						2,363,386
Consumer - Commercial Lease Financing 3.7%
			Aircastle Ltd.
	150,000		4.63%, due 12/15/18			155,438
	705,000		6.25%, due 12/1/19			764,572
	740,000		5.13%, due 3/15/21			789,025
	340,000		5.50%, due 2/15/22			368,186
	430,000		5.00%, due 4/1/23			459,025
			Navient Corp.
	300,000		5.50%, due 1/15/19			311,625
	2,635,000		4.88%, due 6/17/19			2,720,374	(g)
			Park Aerospace Holdings Ltd.
	1,925,000		5.25%, due 8/15/22			2,033,281	(e)
	1,930,000		5.50%, due 2/15/24			2,040,975	(e)
						9,642,501
Discount Stores 0.5%
	1,320,000		Dollar Tree, Inc., 5.75%, due 3/1/23			1,400,520

See Notes to Financial Statements

9

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PRINCIPAL AMOUNT					VALUE
Electric - Generation 4.3%
			Calpine Corp.
$	1,370,000		6.00%, due 1/15/22		$	1,431,650	(e)
	1,915,000		5.38%, due 1/15/23			1,886,275
			Dynegy, Inc.
	625,000		5.88%, due 6/1/23			551,562
	680,000		7.63%, due 11/1/24			622,200
			NRG Energy, Inc.
	1,490,000		6.25%, due 7/15/22			1,518,027
	1,135,000		6.63%, due 3/15/23			1,152,025
	1,850,000		7.25%, due 5/15/26			1,891,625
	2,340,000		6.63%, due 1/15/27			2,316,600
						11,369,964
Electric - Integrated 1.2%
	495,000		IPALCO Enterprises, Inc., 5.00%, due 5/1/18			508,613
	2,750,000		PPL Energy Supply LLC, 4.60%, due 12/15/21			2,131,250
	615,000		Talen Energy Supply LLC, 6.50%, due 6/1/25			488,925
						3,128,788
Electronics 1.9%
	1,275,000		Amkor Technology, Inc., 6.38%, due 10/1/22			1,329,187
	425,000		Flextronics Int’l Ltd., 5.00%, due 2/15/23			458,340
			Micron Technology, Inc.
	435,000		5.25%, due 8/1/23			450,225	(e)
	440,000		5.50%, due 2/1/25			459,800
	385,000		5.63%, due 1/15/26			407,138	(e)
	670,000		NXP BV/NXP Funding LLC, 4.13%, due 6/1/21			700,988	(e)
	675,000		Sensata Technologies UK Financing Co. PLC, 6.25%, due 2/15/26			730,687	(e)
	455,000		Zebra Technologies Corp., 7.25%, due 10/15/22			491,969
						5,028,334
Energy - Exploration & Production 13.1%
			Antero Resources Corp.
	745,000		5.38%, due 11/1/21			769,213
	1,275,000		5.13%, due 12/1/22			1,294,125
	710,000		Ascent Resources Utica Holdings LLC/ARU Finance Corp., 10.00%, due 4/1/22			732,188	(e)
			Bill Barrett Corp.
	1,788,000		7.00%, due 10/15/22			1,707,540
	920,000		8.75%, due 6/15/25			921,150	(e)
			Chesapeake Energy Corp.
	865,000		6.13%, due 2/15/21			849,862
	1,600,000		5.38%, due 6/15/21			1,512,000
	365,000		5.75%, due 3/15/23			339,450
	2,150,000		5.50%, due 9/15/26			2,115,062	(e)
	635,000		Concho Resources, Inc., 5.50%, due 4/1/23			658,416

See Notes to Financial Statements

10

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PRINCIPAL AMOUNT					VALUE
			Continental Resources, Inc.
$	520,000		4.50%, due 4/15/23		$	512,200
	945,000		3.80%, due 6/1/24			888,300
	440,000		4.90%, due 6/1/44			381,700
			EP Energy LLC/Everest Acquisition Finance, Inc.
	3,751,000		9.38%, due 5/1/20			3,554,072
	940,000		7.75%, due 9/1/22			752,000
	2,770,000		6.38%, due 6/15/23			2,084,425
	805,000		Extraction Oil & Gas Holdings LLC/Extraction Finance Corp., 7.88%, due 7/15/21			843,238	(e)
	930,000		Halcon Resources Corp., 6.75%, due 2/15/25			892,800	(e)
	930,000		Newfield Exploration Co., 5.38%, due 1/1/26			975,337
	1,385,000		Oasis Petroleum, Inc., 6.88%, due 3/15/22			1,402,312
	405,000		PDC Energy, Inc., 6.13%, due 9/15/24			415,125	(e)
			Range Resources Corp.
	925,000		5.00%, due 8/15/22			914,594	(e)
	2,340,000		5.00%, due 3/15/23			2,316,600	(e)
	500,000		4.88%, due 5/15/25			480,000
	2,310,000		Sanchez Energy Corp., 6.13%, due 1/15/23			2,125,177
			SM Energy Co.
	450,000		6.13%, due 11/15/22			456,750
	430,000		5.00%, due 1/15/24			405,275
			Whiting Petroleum Corp.
	705,000		5.00%, due 3/15/19			712,050
	850,000		5.75%, due 3/15/21			845,750
	1,325,000		6.25%, due 4/1/23			1,325,000
	1,160,000		WPX Energy, Inc., 5.25%, due 9/15/24			1,136,800
						34,318,511
Food & Drug Retail 1.4%
			Albertsons Cos. LLC/Safeway, Inc./New Albertson’s, Inc./Albertson’s LLC
	1,730,000		6.63%, due 6/15/24			1,768,925	(e)
	1,220,000		5.75%, due 3/15/25			1,186,450	(e)
	835,000		Rite Aid Corp., 6.13%, due 4/1/23			826,650	(e)
						3,782,025
Food - Wholesale 1.9%
	1,760,000		NBTY, Inc., 7.63%, due 5/15/21			1,870,000	(e)
			Post Holdings, Inc.
	915,000		6.00%, due 12/15/22			976,762	(e)
	530,000		7.75%, due 3/15/24			588,963	(e)
	890,000		5.50%, due 3/1/25			930,050	(e)
	710,000		5.75%, due 3/1/27			735,738	(e)
						5,101,513

See Notes to Financial Statements

11

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PRINCIPAL AMOUNT					VALUE
Gaming 4.0%
			Boyd Gaming Corp.
$	340,000		6.88%, due 5/15/23		$	365,925
	795,000		6.38%, due 4/1/26			856,612
			GLP Capital L.P./GLP Financing II, Inc.
	1,455,000		4.88%, due 11/1/20			1,549,575	(g)
	705,000		5.38%, due 11/1/23			761,400
			Isle of Capri Casinos, Inc.
	740,000		8.88%, due 6/15/20			762,200
	1,103,000		5.88%, due 3/15/21			1,138,847
	435,000		MGM Growth Properties Operating Partnership L.P./MGP Finance Co-Issuer, Inc.,
			5.63%, due 5/1/24			469,256
			MGM Resorts Int’l
	1,030,000		8.63%, due 2/1/19			1,138,150
	405,000		6.63%, due 12/15/21			454,613
			Scientific Games Int’l, Inc.
	640,000		6.25%, due 9/1/20			616,000
	515,000		6.63%, due 5/15/21			496,331
	800,000		10.00%, due 12/1/22			866,600
	318,000		Station Casinos LLC, 7.50%, due 3/1/21			331,118
	750,000		Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 5.50%, due 3/1/25			780,000	(e)
						10,586,627
Gas Distribution 11.1%
	1,055,000		Antero Midstream Partners L.P./Antero Midstream Finance Corp., 5.38%, due 9/15/24			1,078,737	(e)
	1,130,000		Cheniere Corpus Christi Holdings LLC, 5.88%, due 3/31/25			1,203,450	(e)
			Crestwood Midstream Partners L.P./Crestwood Midstream Finance Corp.
	1,550,000		6.25%, due 4/1/23			1,617,812
	710,000		5.75%, due 4/1/25			736,625	(e)
			DCP Midstream LLC
	280,000		9.75%, due 3/15/19			317,100	(e)
	365,000		5.35%, due 3/15/20			380,969	(e)
	375,000		4.75%, due 9/30/21			383,438	(e)
	935,000		6.75%, due 9/15/37			1,024,433	(e)
	1,735,000		5.85%, due 5/21/43			1,656,925	(a)(e)
			DCP Midstream Operating L.P.
	485,000		2.50%, due 12/1/17			485,606
	505,000		5.60%, due 4/1/44			482,275
			Duke Energy Corp.
	270,000		8.13%, due 8/16/30			315,900
	420,000		6.45%, due 11/3/36			450,450	(e)
			Energy Transfer Equity L.P.
	680,000		7.50%, due 10/15/20			766,275
	1,140,000		5.88%, due 1/15/24			1,228,350
	355,000		5.50%, due 6/1/27			381,625

See Notes to Financial Statements

12

---

---

PRINCIPAL AMOUNT					VALUE
			Ferrellgas L.P./Ferrellgas Finance Corp.
$	1,230,000		6.75%, due 1/15/22		$	1,183,875
	1,240,000		6.75%, due 6/15/23			1,196,600
	430,000		NuStar Logistics L.P., 5.63%, due 4/28/27			443,051
	645,000		ONEOK, Inc., 6.00%, due 6/15/35			678,863
	1,470,000		Regency Energy Partners L.P./Regency Energy Finance Corp., 5.50%, due 4/15/23			1,530,402
			Rockies Express Pipeline LLC
	745,000		5.63%, due 4/15/20			796,405	(e)
	450,000		7.50%, due 7/15/38			497,250	(e)
	860,000		6.88%, due 4/15/40			919,125	(e)
	1,565,000		SemGroup Corp./Rose Rock Finance Corp., 5.63%, due 11/15/23			1,545,437
	1,235,000		Summit Midstream Holdings LLC/Summit Midstream Finance Corp., 5.75%, due 4/15/25			1,250,437
			Targa Resources Partners L.P./Targa Resources Partners Finance Corp.
	1,155,000		4.25%, due 11/15/23			1,143,450
	870,000		6.75%, due 3/15/24			948,300
	965,000		5.13%, due 2/1/25			996,362	(e)
	1,470,000		5.38%, due 2/1/27			1,536,150	(e)
			Williams Cos., Inc.
	470,000		4.55%, due 6/24/24			481,163
	535,000		Ser. A, 7.50%, due 1/15/31			632,638
	930,000		5.75%, due 6/24/44			962,550
						29,252,028
Health Facilities 9.5%
	1,500,000		Columbia Healthcare Corp., 7.50%, due 12/15/23			1,713,750
			Columbia/HCA Corp.
	1,500,000		7.69%, due 6/15/25			1,710,000
	2,160,000		7.05%, due 12/1/27			2,386,800
			HCA, Inc.
	525,000		6.50%, due 2/15/20			576,219
	350,000		5.88%, due 3/15/22			388,063
	1,275,000		4.75%, due 5/1/23			1,338,750
	1,565,000		5.00%, due 3/15/24			1,660,856
	380,000		5.38%, due 2/1/25			395,675
	980,000		5.25%, due 4/15/25			1,053,196
	730,000		5.88%, due 2/15/26			775,625
	695,000		4.50%, due 2/15/27			701,596
	3,275,000		IASIS Healthcare LLC/IASIS Capital Corp., 8.38%, due 5/15/19			3,193,125
	455,000		LifePoint Health, Inc., 5.88%, due 12/1/23			469,787
			MPT Operating Partnership L.P./MPT Finance Corp.
	1,100,000		6.38%, due 3/1/24			1,190,750
	1,350,000		5.50%, due 5/1/24			1,420,875
	930,000		5.25%, due 8/1/26			953,250
	1,315,000		Sabra Health Care L.P./Sabra Capital Corp., 5.50%, due 2/1/21			1,372,531

See Notes to Financial Statements

13

---

---

PRINCIPAL AMOUNT					VALUE
			Tenet Healthcare Corp.
$	545,000		6.25%, due 11/1/18		$	571,236
	955,000		5.00%, due 3/1/19			959,183
	1,240,000		7.50%, due 1/1/22			1,326,800	(e)
	505,000		8.13%, due 4/1/22			512,575
	295,000		6.88%, due 11/15/31			252,225
						24,922,867
Health Services 1.0%
	565,000		DaVita HealthCare Partners, Inc., 5.13%, due 7/15/24			580,893
	545,000		DaVita, Inc., 5.75%, due 8/15/22			564,756
			Service Corp. Int’l
	450,000		5.38%, due 1/15/22			464,063
	830,000		5.38%, due 5/15/24			876,688
						2,486,400
Hotels 0.6%
	1,545,000		ESH Hospitality, Inc., 5.25%, due 5/1/25			1,564,313	(e)
Investments & Misc. Financial Services 1.2%
	1,225,000		Icahn Enterprises L.P./Icahn Enterprises Finance Corp., 4.88%, due 3/15/19			1,240,312
			MSCI, Inc.
	815,000		5.25%, due 11/15/24			863,900	(e)
	1,065,000		5.75%, due 8/15/25			1,147,538	(e)
						3,251,750
Machinery 1.3%
	1,024,000		Case New Holland Industrial, Inc., 7.88%, due 12/1/17			1,061,120
			CNH Industrial Capital LLC
	380,000		3.38%, due 7/15/19			385,225
	460,000		4.88%, due 4/1/21			483,575
	440,000		4.38%, due 4/5/22			448,602
	525,000		CNH Industrial NV, 4.50%, due 8/15/23			537,332
	485,000		Manitowoc Foodservice, Inc., 9.50%, due 2/15/24			560,175
						3,476,029
Managed Care 0.3%
	605,000		MPH Acquisition Holdings LLC, 7.13%, due 6/1/24			650,375	(e)
Media Content 3.4%
			Gannett Co., Inc.
	480,000		5.13%, due 10/15/19			492,000
	725,000		5.13%, due 7/15/20			748,563
			Gray Television, Inc.
	620,000		5.13%, due 10/15/24			621,550	(e)
	220,000		5.88%, due 7/15/26			227,700	(e)

See Notes to Financial Statements

14

---

---

PRINCIPAL AMOUNT					VALUE
			iHeartCommunications, Inc.
$	252,000		6.88%, due 6/15/18		$	171,360
	1,022,000		11.25%, due 3/1/21			784,385
			Netflix, Inc.
	665,000		5.50%, due 2/15/22			711,550
	420,000		4.38%, due 11/15/26			413,700	(e)
	45,000		Sinclair Television Group, Inc., 5.38%, due 4/1/21			46,350
			Sirius XM Radio, Inc.
	565,000		4.25%, due 5/15/20			570,650	(e)
	720,000		6.00%, due 7/15/24			770,400	(e)
	1,135,000		5.38%, due 7/15/26			1,161,956	(e)
			Univision Communications, Inc.
	550,000		6.75%, due 9/15/22			576,125	(e)
	1,680,000		5.13%, due 5/15/23			1,707,300	(e)
						9,003,589
Medical Products 0.9%
			Fresenius Medical Care US Finance II, Inc.
	1,095,000		6.50%, due 9/15/18			1,155,225	(e)
	530,000		5.88%, due 1/31/22			581,012	(e)
	475,000		4.75%, due 10/15/24			485,688	(e)
						2,221,925
Metals - Mining Excluding Steel 5.2%
	390,000		Alcoa, Inc., 5.13%, due 10/1/24			408,525
	365,000		Anglo American Capital PLC, 4.45%, due 9/27/20			379,600	(e)
			First Quantum Minerals Ltd.
	2,300,000		7.00%, due 2/15/21			2,380,500	(e)
	1,385,000		7.25%, due 5/15/22			1,426,550	(e)
	1,085,000		FMG Resources (August 2006) Pty Ltd., 9.75%, due 3/1/22			1,248,428	(e)
			Freeport-McMoRan, Inc.
	920,000		2.38%, due 3/15/18			915,400
	245,000		4.00%, due 11/14/21			240,406
	1,420,000		3.88%, due 3/15/23			1,317,050
	1,100,000		5.40%, due 11/14/34			979,000
	450,000		5.45%, due 3/15/43			383,625
			Hudbay Minerals, Inc.
	400,000		7.25%, due 1/15/23			425,500	(e)
	1,080,000		7.63%, due 1/15/25			1,156,950	(e)
	775,000		Novelis Corp., 5.88%, due 9/30/26			796,313	(e)
			Teck Resources Ltd.
	435,000		4.75%, due 1/15/22			450,225
	1,185,000		6.25%, due 7/15/41			1,256,100
						13,764,172

See Notes to Financial Statements

15

---

---

PRINCIPAL AMOUNT					VALUE
Oil Field Equipment & Services 1.0%
			Precision Drilling Corp.
$	669,659		6.63%, due 11/15/20		$	679,804
	675,000		6.50%, due 12/15/21			683,438
	1,350,000		5.25%, due 11/15/24			1,299,375
						2,662,617
Packaging 2.6%
	1,310,000		Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., 6.00%, due 2/15/25			1,354,212	(e)
			Ball Corp.
	550,000		4.38%, due 12/15/20			578,875
	720,000		5.00%, due 3/15/22			768,600
	560,000		Berry Plastics Corp., 5.13%, due 7/15/23			582,232
	605,000		BWAY Holding Co., 5.50%, due 4/15/24			611,806	(e)
			Reynolds Group Issuer, Inc.
	680,000		5.75%, due 10/15/20			700,400
	495,824		6.88%, due 2/15/21			509,459
	1,105,000		5.13%, due 7/15/23			1,151,963	(e)
	635,000		Sealed Air Corp., 5.50%, due 9/15/25			679,450	(e)
						6,936,997
Personal & Household Products 1.0%
			Energizer Holdings, Inc.
	485,000		4.70%, due 5/19/21			514,100
	1,490,000		4.70%, due 5/24/22			1,587,356
	370,000		Spectrum Brands, Inc., 5.75%, due 7/15/25			396,607
						2,498,063
Pharmaceuticals 4.9%
	2,890,000		Endo Finance LLC & Endo Finco, Inc., 5.38%, due 1/15/23			2,478,175	(e)
			Endo Ltd./Endo Finance LLC/Endo Finco, Inc.
	1,375,000		6.00%, due 7/15/23			1,204,844	(e)
	410,000		6.00%, due 2/1/25			346,245	(e)
	605,000		Jaguar Holding Co. II/Pharmaceutical Product Development LLC, 6.38%, due 8/1/23			630,712	(e)
	405,000		Mallinckrodt Int’l Finance SA/Mallinckrodt CB LLC, 5.50%, due 4/15/25			368,550	(e)
			Valeant Pharmaceuticals Int’l, Inc.
	2,670,000		5.50%, due 3/1/23			1,969,125	(e)
	6,990,000		5.88%, due 5/15/23			5,163,862	(e)
	835,000		6.13%, due 4/15/25			616,439	(e)
						12,777,952
Printing & Publishing 2.4%
			R.R. Donnelley & Sons Co.
	2,220,000		7.63%, due 6/15/20			2,436,450
	1,540,000		7.88%, due 3/15/21			1,663,200
	1,005,000		6.50%, due 11/15/23			981,131
	1,160,000		6.00%, due 4/1/24			1,088,950
						6,169,731

See Notes to Financial Statements

16

---

---

PRINCIPAL AMOUNT					VALUE
Recreation & Travel 1.2%
			Cedar Fair L.P./Canada’s Wonderland Co./Magnum Management Corp.
$	535,000		5.25%, due 3/15/21		$	549,659
	430,000		5.38%, due 4/15/27			444,470	(e)
			NCL Corp. Ltd.
	555,000		4.63%, due 11/15/20			568,875	(e)
	1,100,000		4.75%, due 12/15/21			1,127,500	(e)
	505,000		Royal Caribbean Cruises Ltd., 5.25%, due 11/15/22			556,762
						3,247,266
Restaurants 0.5%
	500,000		1011778 BC ULC/New Red Finance, Inc., 4.63%, due 1/15/22			515,150	(e)
	750,000		KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC, 5.25%, due 6/1/26			768,750	(e)
						1,283,900
Software - Services 4.0%
			First Data Corp.
	990,000		7.00%, due 12/1/23			1,061,478	(e)
	1,145,000		5.00%, due 1/15/24			1,171,049	(e)
	1,117,000		Infor Software Parent LLC/Infor Software Parent, Inc., 7.13% Cash/7.88% PIK, due 5/1/21			1,141,574	(e)(f)
			Nuance Communications, Inc.
	374,000		5.38%, due 8/15/20			381,947	(e)
	1,370,000		6.00%, due 7/1/24			1,445,350	(e)
	1,010,000		Open Text Corp., 5.88%, due 6/1/26			1,078,175	(e)
	1,420,000		Rackspace Hosting, Inc., 8.63%, due 11/15/24			1,503,425	(e)
	615,000		Symantec Corp., 5.00%, due 4/15/25			635,756	(e)
	2,104,000		Syniverse Foreign Holdings Corp., 9.13%, due 1/15/22			2,088,220	(e)
						10,506,974
Specialty Retail 1.5%
	390,000		Argos Merger Sub, Inc., 7.13%, due 3/15/23			355,875	(e)
	995,000		Hanesbrands, Inc., 4.88%, due 5/15/26			990,025	(e)
	185,000		L Brands, Inc., 5.63%, due 10/15/23			194,213
	700,000		Liberty Media Corp., 8.50%, due 7/15/29			778,750
	190,000		Penske Automotive Group, Inc., 5.38%, due 12/1/24			191,425
			QVC, Inc.
	665,000		5.13%, due 7/2/22			697,103
	825,000		5.45%, due 8/15/34			763,066
						3,970,457
Steel Producers - Products 1.4%
	3,310,000		ArcelorMittal, 7.75%, due 10/15/39			3,781,675

See Notes to Financial Statements

17

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---

PRINCIPAL AMOUNT					VALUE
Support - Services 5.2%
$	770,000		ADT Corp., 4.88%, due 7/15/32		$	671,825	(e)
	340,000		AECOM, 5.88%, due 10/15/24			364,820
	3,460,000		Anna Merger Sub, Inc., 7.75%, due 10/1/22			2,932,350	(e)
	905,000		Aramark Services, Inc., 5.13%, due 1/15/24			954,775
			Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
	975,000		5.50%, due 4/1/23			960,375
	535,000		6.38%, due 4/1/24			534,331	(e)
	775,000		5.25%, due 3/15/25			730,437	(e)
	1,750,000		Hertz Corp., 5.50%, due 10/15/24			1,500,625	(e)
	1,813,000		IHS Markit Ltd., 5.00%, due 11/1/22			1,937,644	(e)
			Iron Mountain, Inc.
	820,000		6.00%, due 8/15/23			871,234
	926,000		5.75%, due 8/15/24			953,780
	1,080,000		United Rental N.A., Inc., 5.75%, due 11/15/24			1,138,050
						13,550,246
Technology Hardware & Equipment 3.0%
	350,000		CDW LLC/CDW Finance Corp., 5.00%, due 9/1/25			358,750
	725,000		CommScope Technologies LLC, 6.00%, due 6/15/25			773,031	(e)
			Diamond 1 Finance Corp./Diamond 2 Finance Corp.
	540,000		5.88%, due 6/15/21			572,400	(e)
	740,000		6.02%, due 6/15/26			815,108	(e)
	895,000		EMC Corp., 1.88%, due 6/1/18			891,103
	575,000		Riverbed Technology, Inc., 8.88%, due 3/1/23			592,250	(e)
	3,345,000		Western Digital Corp., 10.50%, due 4/1/24			3,947,100
						7,949,742
Telecom - Satellite 0.8%
	534,000		Hughes Satellite Systems Corp., 6.50%, due 6/15/19			577,388
			Intelsat Luxembourg SA
	1,470,000		7.75%, due 6/1/21			850,762
	1,340,000		8.13%, due 6/1/23			763,800
						2,191,950
Telecom - Wireless 5.8%
			Sprint Corp.
	315,000		7.25%, due 9/15/21			344,531
	2,760,000		7.88%, due 9/15/23			3,098,100
	3,335,000		7.13%, due 6/15/24			3,626,812
			Sprint Nextel Corp.
	570,000		9.00%, due 11/15/18			623,438	(e)
	1,905,000		6.00%, due 11/15/22			1,984,772

See Notes to Financial Statements

18

---

---

PRINCIPAL AMOUNT					VALUE
			T-Mobile USA, Inc.
$	425,000		6.13%, due 1/15/22		$	448,906
	1,940,000		6.00%, due 3/1/23			2,065,499
	450,000		5.38%, due 4/15/27			481,500
	345,000		Uniti Group, Inc./Uniti Fiber Holdings, Inc./CSL Capital LLC, 7.13%, due 12/15/24			352,763	(e)(j)
			Wind Acquisition Finance SA
	1,325,000		4.75%, due 7/15/20			1,346,531	(e)
	800,000		7.38%, due 4/23/21			832,000	(e)
						15,204,852
Telecom - Wireline Integrated & Services 8.3%
	395,000		CenturyLink, Inc., Ser. W, 6.75%, due 12/1/23			423,144
	3,079,000		Citizens Communications Co., 9.00%, due 8/15/31			2,632,545
	1,050,000		Communications Sales & Leasing, Inc./CSL Capital LLC, 8.25%, due 10/15/23			1,120,549
	3,100,000		Embarq Corp., 8.00%, due 6/1/36			3,158,125
	655,000		Equinix, Inc., 5.88%, due 1/15/26			705,763
			Frontier Communications Corp.
	360,000		8.13%, due 10/1/18			382,950
	270,000		7.13%, due 1/15/23			236,250
	610,000		7.63%, due 4/15/24			523,075
	4,130,000		11.00%, due 9/15/25			3,980,287
			Level 3 Financing, Inc.
	1,515,000		5.38%, due 8/15/22			1,564,540
	610,000		5.13%, due 5/1/23			626,013
	430,000		5.38%, due 1/15/24			446,916
	710,000		SoftBank Group Corp., 4.50%, due 4/15/20			737,974	(e)
	1,080,000		Telecom Italia Capital SA, 6.00%, due 9/30/34			1,104,300
	2,111,000		U.S. West Communications Group, 6.88%, due 9/15/33			2,111,781
			Zayo Group LLC/Zayo Capital, Inc.
	365,000		6.00%, due 4/1/23			387,813
	1,500,000		5.75%, due 1/15/27			1,591,875	(e)
						21,733,900
Theaters & Entertainment 1.0%
			AMC Entertainment Holdings, Inc.
	905,000		5.75%, due 6/15/25			933,282
	545,000		6.13%, due 5/15/27			556,581	(e)
	1,167,000		Regal Entertainment Group, 5.75%, due 3/15/22			1,219,515
						2,709,378
Total Corporate Bonds (Cost $343,347,052)						351,922,246

See Notes to Financial Statements

19

---

---

NUMBER OF SHARES						VALUE
Short-Term Investment 2.2%
Investment Company 2.2%
	5,718,009			State Street Institutional U.S. Government Money Market Fund Premier Class,0.68%		$	5,718,009	(g)(k)
				(Cost $5,718,009)
		Total Investments 144.9% (Cost $372,169,919)					381,079,046
		Other Assets Less Liabilities (31.6)%					(83,030,969	)(l)
		Liquidation Value of Mandatory Redeemable Preferred Shares (13.3)%					(35,000,000	)
		Net Assets Applicable to Common Shareholders 100.0%				$	263,048,077

(a)	Variable or floating rate security. The interest rate shown was the current rate as of April 30, 2017 and changes periodically.
(b)	Illiquid security.
(c)	All or a portion of this security was purchased on a delayed delivery basis.
(d)	All or a portion of this security had not settled as of April 30, 2017 and thus may not have an interest rate in effect. Interest rates do not take effect until settlement.
(e)	Securities were purchased under Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”), or are otherwise restricted and, unless registered under the 1933 Act or exempted from registration, may only be sold to qualified institutional investors or may have other restrictions on resale. At April 30, 2017, these securities amounted to $147,111,599 or 55.9% of net assets applicable to common stockholders of the Fund. Securities denoted with (e) but without (b) have been deemed by the investment manager to be liquid.
(f)	Payment-in-kind (PIK) security.
(g)	All or a portion of this security is segregated in connection with obligations for when-issued securities and/or swap contracts and/or delayed delivery securities with a total value of approximately $13,278,264.
(h)	Security fair valued as of April 30, 2017 in accordance with procedures approved by the Board of Directors. Total value of all such securities at April 30, 2017, amounted to approximately $42, which represents 0.0% of net assets applicable to common stockholders of the Fund.
(i)	Defaulted Security.
(j)	When-issued security. Total value of all such securities at April 30, 2017, amounted to $352,763, which represents 0.1% of net assets applicable to common stockholders of the Fund.
(k)	Represents 7-day effective yield as of April 30, 2017.
(l)	Includes the impact of the Fund’s open positions in derivatives at April 30, 2017.

See Notes to Financial Statements

20

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Derivative Instruments

Interest rate swap contracts (“interest rate swaps”)

At April 30, 2017, the Fund had outstanding centrally cleared interest rate swaps as follows:

Portfolio

Notional

Pays/Receives

Floating Rate

Annual

Termination

Total Fair

Clearinghouse

Amount

Floating Rate

Index

Fixed-rate

Date

Value(a)

CME Group, Inc.

$

25,000,000

Receive

3-month LIBOR

1.371%

5/14/2018

$

(96,944

)

CME Group, Inc.

$

20,000,000

Receive

3-month LIBOR

1.292%

4/17/2019

109,846

CME Group, Inc.

$

25,000,000

Receive

3-month LIBOR

1.138%

6/17/2021

638,787

CME Group, Inc.

$

20,000,000

Receive

3-month LIBOR

0.994%

6/29/2021

643,267

Total

$

1,294,956

(a)	Total Fair Value reflects the appreciation/(depreciation) of the interest rate swaps plus accrued interest as of April 30, 2017.

For the six months ended April 30, 2017, the average notional value of interest rate swaps was $91,424,353 when the Fund paid the fixed rate.

At April 30, 2017, the Fund had $612,920 deposited in a segregated account to cover margin requirements for interest rate swaps.

The following is a summary, categorized by Level (see Note A of Notes to Financial Statements), of inputs used to value the Fund’s investments as of April 30, 2017:

Asset Valuation Inputs		Level 1			Level 2			Level 3(b)			Total
Investments:
Loan Assignments(a)		$	—		$	23,438,791		$	—		$	23,438,791
Corporate Bonds(a)			—			351,922,246			—			351,922,246
Short-Term Investment			—			5,718,009			—			5,718,009
Total Investments		$	—		$	381,079,046		$	—		$	381,079,046

(a)	The Schedule of Investments provides information on the industry or sector categorization for the portfolio.

See Notes to Financial Statements

21

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(b)	The following is a reconciliation between the beginning and ending balances of investments in which unobservable inputs (Level 3) were used in determining value:

Net change in

unrealized

appreciation/

(depreciation)

Beginning

Change in

from

balance,

Accrued

unrealized

Transfers

Transfers

Balance

investments

as of

discounts/

Realized

appreciation/

into

out of

as of

still held as

11/1/2016

(premiums)

gain/(loss)

(depreciation)

Purchases

Sales

Level 3

Level 3

4/30/2017

of 4/30/2017

Investments in

Securities

Loan Assignments(c)

Radio &

Television

$308,427

$—

$—

$—

$—

$—

$—

$(308,427)

$—

$—

Total

$308,427

$—

$—

$—

$—

$—

$—

$(308,427)

$—

$—

(c)	At the beginning of the period, the Fund’s Level 3 investments were valued based on a single quotation obtained from a dealer. The Fund held no Level 3 securities at April 30, 2017.

As of the six months ended April 30, 2017, certain securities were transferred from one level (as of October 31, 2016) to another. Based on beginning of period market values as of November 1, 2016, $308,427 was transferred from Level 3 to Level 2. Transfers of loan assignments into or out of Level 3 were primarily due to the pricing methodology being based on a single broker quote (Level 3), or a single observable input (Level 3) by the independent pricing service. As of the six months ended April 30, 2017, the Fund had no transfers between Levels 1 and 2.

The following is a summary, categorized by Level (see Note A of Notes to Financial Statements), of inputs used to value the Fund’s derivatives as of April 30, 2017:

	Level 1		Level 2				Level 3		Total
Swaps
Assets	$—		$	1,391,900			$—		$	1,391,900
Liabilities	—			(96,944	)		—			(96,944	)
Total	$—		$	1,294,956			$—		$	1,294,956

See Notes to Financial Statements

22

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Neuberger Berman

		HIGH YIELD
		STRATEGIES
		FUND INC.
		April 30, 2017
Assets
Investments in securities, at value* (Note A)—see Schedule of Investments:
Unaffiliated issuers		$	381,079,046
Cash collateral segregated for interest rate swaps			612,920
Interest receivable			6,030,685
Receivable for securities sold			5,495,965
Receivable for variation margin on centrally cleared interest rate swaps (Note A)			217,103
Total Assets			393,435,719
Liabilities
Notes payable (net of unamortized deferred issuance costs of $144,363) (Note A)			89,855,637
Mandatory Redeemable Preferred Shares, Series B ($25,000 liquidation value per share;
1,400 shares issued and outstanding) (Note A)			35,000,000
Distributions payable—preferred shares			106,897
Distributions payable—common stock			24,051
Payable for securities purchased			4,848,944
Payable to investment manager (Note B)			190,600
Payable to administrator (Note B)			15,883
Payable to directors			1,267
Interest payable (Note A)			181,877
Accrued expenses and other payables			162,486
Total Liabilities			130,387,642
Net Assets applicable to Common Stockholders		$	263,048,077
Net Assets applicable to Common Stockholders consist of:
Paid-in capital—common stock		$	279,796,188
Distributions in excess of net investment income			(268,175	)
Accumulated net realized gains (losses) on investments			(26,684,019	)
Net unrealized appreciation (depreciation) in value of investments			10,204,083
Net Assets applicable to Common Stockholders		$	263,048,077
Shares of Common Stock Outstanding ($0.0001 par value; 999,999,997,100 shares authorized)			19,540,585
Net Asset Value Per Share of Common Stock Outstanding		$	13.46
* Cost of Investments		$	372,169,919

See Notes to Financial Statements

23

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Neuberger Berman

		HIGH YIELD STRATEGIES
		FUND INC.
		For the Six Months Ended
		April 30, 2017
Investment Income:
Income (Note A):
Interest income-unaffiliated issuers		$11,908,138
Expenses:
Investment management fees (Note B)		1,141,564
Administration fees (Note B)		95,130
Audit fees		31,970
Basic maintenance expense (Note A)		19,836
Custodian and accounting fees		101,469
Insurance expense		6,506
Legal fees		47,022
Stockholder reports		35,063
Stock exchange listing fees		4,127
Stock transfer agent fees		11,395
Distributions to mandatory redeemable preferred shareholders (Note A)		593,105
Directors' fees and expenses		22,201
Interest expense (Note A)		993,202
Miscellaneous		12,597
Total expenses		3,115,187
Custodian out-of-pocket expenses refunded (Note E)		(51,210	)
Total net expenses		3,063,977
Net investment income (loss)		$8,844,161
Realized and Unrealized Gain (Loss) on Investments (Note A):
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers		4,618,594
Interest rate swaps		(136,188	)
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities		1,320,731
Interest rate swaps		1,279,515
Net gain (loss) on investments		7,082,652
Net increase (decrease) in net assets applicable to Common Stockholders resulting from operations		$15,926,813

See Notes to Financial Statements

24

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Neuberger Berman

		HIGH YIELD
		STRATEGIES FUND INC.
		Six Months Ended			Year Ended
		April 30, 2017			October 31, 2016
		(Unaudited)
Increase (Decrease) in Net Assets Applicable to Common Stockholders:
From Operations (Note A):
Net investment income (loss)		$8,844,161			$18,074,545
Net realized gain (loss) on investments		4,482,406			(16,375,650	)
Net increase from payments by affiliates (Note B)		—			2,435
Change in net unrealized appreciation (depreciation) of investments		2,600,246			25,655,891
Net increase (decrease) in net assets applicable to
Common Stockholders resulting from operations		15,926,813			27,357,221
Distributions to Common Stockholders From (Note A):
Net investment income		(9,232,926	)		(17,647,876	)
Tax return of capital		—			(1,111,086	)
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders		6,693,887			8,598,259
Net Assets Applicable to Common Stockholders:
Beginning of period		256,354,190			247,755,931
End of period		$263,048,077			$256,354,190
Undistributed net investment income (loss) at end of period		$—			$120,590
Distributions in excess of net investment income at end of period		$(268,175	)		$—

See Notes to Financial Statements

25

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Neuberger Berman

		HIGH YIELD
		STRATEGIES
		FUND INC.
		For the Six Months
		Ended April 30, 2017
Increase (decrease) in cash:
Cash flows from operating activities:
Net increase in net assets applicable to Common Stockholders resulting from operations		$15,926,813
Adjustments to reconcile net increase in net assets applicable to Common Stockholders resulting from
operations to net cash provided by operating activities:
Changes in assets and liabilities:
Purchase of investment securities		(139,011,440	)
Proceeds from disposition of investment securities		140,364,537
Purchase/sale of short-term investment securities, net		292,800
Increase in receivable (payable) for variation margin on centrally cleared interest rate swaps		287,980
Unrealized appreciation of centrally cleared interest rate swaps		1,250,933
Decrease in interest receivable		125,423
Decrease in deferred offering costs		11,076
Amortization of deferred offering costs		16,185
Increase in receivable for securities sold		(4,488,460	)
Decrease in cash collateral segregated for interest rate swaps		226,033
Increase in accumulated unpaid dividends on preferred shares		6,169
Increase in payable for securities purchased		883,022
Increase in interest payable		18,861
Net amortization of premium (discount) on investments		(417,852	)
Decrease in accrued expenses and other payables		(16,507	)
Unrealized appreciation on securities		(1,320,731	)
Unrealized appreciation on interest rate swaps		(1,279,515	)
Net realized gain from investments		(4,618,594	)
Net realized loss from interest rate swaps		136,188
Net cash provided by (used in) operating activities		$8,392,921
Cash flows from financing activities:
Cash distributions paid on common stock		(9,236,322	)
Net cash provided by (used in) financing activities		(9,236,322	)
Net increase (decrease) in cash		(843,401	)
Cash:
Beginning balance		843,401
Ending balance		$0
Supplemental disclosure
Cash paid for interest		$974,341

See Notes to Financial Statements

26

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Note A—Summary of Significant Accounting Policies:

1	General: Neuberger Berman High Yield Strategies Fund Inc. (the “Fund”) was organized as a Maryland corporation on March 18, 2010, and registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. Under the 1940 Act, the status of a fund that was registered as non-diversified may, under certain circumstances, change to that of a diversified fund. The Fund is currently a diversified fund. The Fund’s Board of Directors (the “Board”) may classify or re-classify any unissued shares of capital stock into one or more classes of preferred stock without the approval of stockholders. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services—Investment Companies.” The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires Neuberger Berman Investment Advisers LLC (“Management”) to make estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates.
2	Portfolio valuation: In accordance with Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement” (“ASC 820”), all investments held by the Fund are carried at the value that Management believes the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in valuing the Fund’s investments, some of which are discussed below. Significant Management judgment may be necessary to value investments in accordance with ASC 820. ASC 820 established a three-tier hierarchy of inputs to create a classification of value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

●	Level 1 – quoted prices in active markets for identical investments
●	Level 2 – other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)
●	Level 3 – unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities. The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities. The value of the Fund’s investments in debt securities is determined by Management primarily by obtaining valuations from independent pricing services based on readily available bid or offer quotations, respectively, or if quotations are not available, by methods which include various considerations based on security type (generally Level 2 inputs). In addition to the consideration of yields or prices of securities of comparable quality, coupon, maturity and type, indications as to values from dealers, and general market conditions, the following is a description of other Level 2 inputs and related valuation techniques used by independent pricing services to value certain types of debt securities held by the Fund:

Corporate Bonds. Inputs used to value corporate debt securities generally include relative credit information, observed market movements, sector news, U.S. Treasury yield curve or relevant benchmark curve, and other market information, which may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data, such as market research publications, when available (“Other Market Information”).

High Yield Securities. Inputs used to value high yield securities generally include a number of observations of equity and credit default swap curves related to the issuer and Other Market Information.

27

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	The value of loan assignments is determined by Management primarily by obtaining valuations from independent pricing services based on broker quotes (generally Level 2 or Level 3 inputs depending on the number of quotes available). The value of interest rate swaps is determined by Management primarily by obtaining valuations from independent pricing services based on references to the underlying rates including the local overnight index swap rate and the respective interbank offered forward rate to produce the daily price. The present value is calculated based off of expected cash flows based on swap parameters along with reference to the underlying yield curve and reference rate (generally Level 2 inputs). Management has developed a process to periodically review information provided by independent pricing services for all types of securities. Investments in non-exchange traded investment companies are valued using the respective fund’s daily calculated net asset value per share (Level 2 inputs). If a valuation is not available from an independent pricing service, or if Management has reason to believe that the valuation received does not represent the amount the Fund might reasonably expect to receive on a current sale in an orderly transaction, Management seeks to obtain quotations from brokers or dealers (generally considered Level 2 or Level 3 inputs depending on the number of quotes available). If such quotations are not readily available, the security is valued using methods the Fund’s Board has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security. Numerous factors may be considered when determining the fair value of a security based on Level 2 or Level 3 inputs, including available analyst, media or other reports, securities within the same industry with recent highly correlated performance, trading in futures or American Depositary Receipts (“ADRs”) and whether the issuer of the security being fair valued has other securities outstanding. Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades.
3	Securities transactions and investment income: Securities transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium, where applicable, and accretion of discount on securities (adjusted for original issue discount, where applicable) is recorded on the accrual basis. Realized gains and losses from security transactions are recorded on the basis of identified cost and stated separately in the Statement of Operations. Included in net realized gain (loss) on investments are proceeds from the settlements of class action litigation in which the Fund participated as a class member. The amount of such proceeds for the six months ended April 30, 2017 was $1,529.
4	Income tax information: It is the policy of the Fund to continue to qualify for treatment as a regulated investment company (“RIC”) by complying with the requirements of the U.S. Internal Revenue Code applicable to RICs and to distribute substantially all of its net investment income and net realized capital gains to its stockholders. To the extent the Fund distributes substantially all of its net investment income and net realized capital gains to stockholders, no federal income or excise tax provision is required. The Fund has adopted the provisions of ASC 740 “Income Taxes” (“ASC 740”). ASC 740 sets forth a minimum threshold for financial statement recognition of a tax position taken, or expected to be taken, in a tax return. The Fund recognizes interest and penalties, if any, related to unrecognized tax positions as an income tax expense in the Statement of Operations. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for the tax years for which the applicable statutes of limitations have not yet expired. As of April 30, 2017, the Fund did not have any unrecognized tax positions. At April 30, 2017, the cost of investments for U.S. federal income tax basis was $372,195,275. Gross unrealized appreciation of investments was $14,872,219 and gross unrealized depreciation of investments was $5,988,448 resulting in net unrealized appreciation of $8,883,771 based on cost for U.S. federal income tax purposes.

28

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Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. As determined on October 31, 2016, permanent differences resulting primarily from different book and tax accounting were reclassified at year end. Such differences may be attributed to the tax treatment of one or more of the following: gains and losses on interest rate swaps, expiration of capital loss carryforwards and non-deductible restructuring costs. These reclassifications had no effect on net income, net asset value (“NAV”) applicable to common stockholders or NAV per share of common stock of the Fund. For the year ended October 31, 2016, the Fund recorded the following permanent reclassifications:

				Accumulated Net
		Undistributed		Realized Gains
		Net Investment		(Losses) on
Paid-in Capital		Income (Loss)		Investments
$(4,993,455)		$(694,298)		$5,687,753

The tax character of distributions paid during the years ended October 31, 2016 and October 31, 2015 was as follows:

Distributions Paid From:
Ordinary Income		Long-Term Capital Gains		Tax Return of Capital		Total
2016	2015	2016	2015	2016	2015	2016	2015
$18,712,931	$19,331,537	$—	$—	$1,111,086	$1,351,795	$19,824,017	$20,683,332

As of October 31, 2016, the components of distributable earnings (accumulated losses) on a U.S. federal income tax basis were as follows:

Undistributed	Undistributed	Unrealized	Loss	Other
Ordinary	Long-Term	Appreciation/	Carryforwards	Temporary
Income	Capital Gain	(Depreciation)	and Deferrals	Differences	Total
$—	$—	$7,796,519	$(31,110,342)	$(128,175)	$(23,441,998)

The temporary differences between book basis and tax basis distributable earnings are primarily due to: losses disallowed and recognized on wash sales, distribution payments, mark to market on certain swap contract transactions, delayed settlement compensation on bank loans and capital loss carryforwards. To the extent the Fund’s net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of the Fund not to distribute such gains. The Regulated Investment Company Modernization Act of 2010 made changes to the capital loss carryforward rules allowing for RICs to carry forward capital losses indefinitely and to retain the character of capital loss carryforwards as short-term or long-term (“Post-Enactment”). Rules in effect previously limited the carryforward period to eight years and all carryforwards were considered short-term in character (“Pre-Enactment”). As determined at October 31, 2016, the Fund had unused capital loss carryforwards available for federal income tax purposes to offset net realized capital gains, if any, as follows:

	Pre-Enactment
	Expiring in: 2017
	$4,089,608

Post-Enactment (No Expiration Date)
Long-Term	Short-Term
$22,480,483	$4,540,251

During the year ended October 31, 2016, the Fund had capital loss carryforwards expire of $4,971,059.

29

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5	Foreign taxes: Foreign taxes withheld, if any, represent amounts withheld by foreign tax authorities net of refunds recoverable.
6	Distributions to common stockholders: The Fund earns income, net of expenses, daily on its investments. It is the policy of the Fund to declare and pay monthly distributions to common stockholders. The Fund has adopted a policy to pay common stockholders a stable monthly distribution. The Fund’s ability to satisfy its policy will depend on a number of factors, including the stability of income received from its investments, the availability of capital gains, distributions paid on any preferred shares, interest paid on any notes and the level of Fund expenses. In an effort to maintain a stable monthly distribution amount, the Fund may pay distributions consisting of net investment income, net realized gains and paid-in capital. There is no assurance that the Fund will always be able to pay distributions of a particular size, or that distributions will consist solely of net investment income and net realized capital gains. The composition of the Fund’s distributions for the calendar year 2017 will be reported to Fund stockholders on IRS Form 1099-DIV. The Fund may pay distributions in excess of those required by its stable distribution policy to avoid excise tax or to satisfy the requirements of Subchapter M of the U.S. Internal Revenue Code. Distributions to common stockholders are recorded on the ex-date. Net realized capital gains, if any, will be offset to the extent of any available capital loss carryforwards. Any such offset will not reduce the level of the stable distribution paid by the Fund. Distributions to preferred stockholders are accrued and determined as described in Note A-8. On April 28, 2017, the Fund declared a monthly distribution to common stockholders in the amount of $0.0725 per share, payable on May 31, 2017 to stockholders of record on May 15, 2017, with an ex-date of May 11, 2017. Subsequent to April 30, 2017, the Fund declared a monthly distribution to common stockholders in the amount of $0.0725 per share, payable on June 30, 2017 to stockholders of record on June 15, 2017, with an ex-date of June 13, 2017.
7	Expense allocation: Certain expenses are applicable to multiple funds within the complex of related investment companies, which includes open-end and closed-end investment companies for which Management serves as investment manager. Expenses directly attributable to the Fund are charged to the Fund. Expenses borne by the complex of related investment companies that are not directly attributable to a particular investment company (e.g., the Fund) are allocated among the Fund and the other investment companies or series thereof in the complex on the basis of relative net assets, except where a more appropriate allocation of expenses to each of the investment companies or series thereof in the complex can otherwise be made fairly.
8	Financial leverage: In 2010, the Fund issued 1,087 privately placed perpetual preferred shares (“PPS”) with an aggregate liquidation preference of $27,175,000 and privately placed notes (“PNs”) with an aggregate principal value of $82,610,000. In September 2013, the Fund issued privately placed notes (“New PNs”) with an aggregate principal value of $90,000,000 and Mandatory Redeemable Preferred Shares, Series B (“MRPS” and, together with the New PNs, “Private Securities”) with an aggregate liquidation preference of $35,000,000 to holders of the PNs and PPS and used the proceeds to redeem and prepay their PNs and PPS and increase the Fund’s leverage. The New PNs and MRPS have a maturity date of September 18, 2023. The interest on the New PNs is accrued daily and paid quarterly. The MRPS have a liquidation preference of $25,000 per share plus any accumulated unpaid distributions, whether or not earned or declared by the Fund, but excluding interest thereon (“Liquidation Value”). Distributions on the MRPS are accrued daily and paid quarterly. The PNs and PPS had these same terms. For financial reporting purposes only, the liquidation preference of the MRPS is recognized as a liability in the Statement of Assets and Liabilities. For the six months ended April 30, 2017, the distribution rates on the MRPS ranged from 3.24% to 3.55% and the interest rates on the New PNs ranged from 2.04% to 2.35%.

30

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The table below sets forth key terms of the MPRS.

		Mandatory						Aggregate
		Redemption		Interest		Shares		Liquidation		Estimated
Series		Date		Rate		Outstanding		Preference		Fair Value
Series B		9/18/23		3.5468%*		1,400		$35,000,000		$35,000,000

	* Floating rate effective for the six months ended April 30, 2017. The Fund has paid up front offering and organizational expenses which are being amortized over the life of the New PNs and MRPS. The expenses are included in the interest expense that is reflected in the Statement of Operations. The Fund may redeem MRPS or prepay the New PNs, in whole or in part, at its option after giving a minimum amount of notice to the relevant holders of the Private Securities but will incur additional expenses if it chooses to so redeem or prepay. The Fund is also subject to certain restrictions relating to the Private Securities. Failure to comply with these restrictions could preclude the Fund from declaring any distributions to common stockholders or repurchasing shares of common stock and/or could trigger the mandatory redemption of MRPS at Liquidation Value and certain expenses and/or mandatory prepayment of New PNs at par plus accrued but unpaid interest and certain expenses. The holders of MRPS are entitled to one vote per share and will vote with holders of shares of common stock as a single class, except that the holders of MRPS will vote separately as a class on certain matters, as required by law or the Fund’s organizational documents. The holders of MRPS, voting as a separate class, are entitled at all times to elect two Directors of the Fund, and to elect a majority of the Directors of the Fund if the Fund fails to pay distributions on MRPS for two consecutive years.
9	Concentration of credit risk: The Fund will normally invest at least 80% of its total assets in high yield debt securities of U.S. and foreign issuers, which include securities that are rated below investment grade by a rating agency or are unrated debt securities determined to be of comparable quality by the Fund’s investment manager. Due to the likelihood of volatility and potential illiquidity of the high yield securities in which the Fund invests and the real or perceived difficulty of issuers of those high yield securities to meet their payment obligations during economic downturns or because of negative business developments relating to the issuer or its industry in general, the value and/or price of the Fund’s shares of common stock may fluctuate more than would be the case if the Fund did not concentrate in high yield securities.
10	Derivative instruments: The Fund’s use of derivatives during the six months ended April 30, 2017, is described below. Please see the Schedule of Investments for the Fund’s open positions in derivatives, at April 30, 2017. The Fund has adopted the provisions of ASC 815 “Derivatives and Hedging” (“ASC 815”). The disclosure requirements of ASC 815 distinguish between derivatives that qualify for hedge accounting and those that do not. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of Operations, they do not qualify for hedge accounting. Accordingly, even though the Fund’s investments in derivatives may represent economic hedges, they are considered non-hedge transactions for purposes of this disclosure. Interest rate swaps: During the six months ended April 30, 2017 the Fund used interest rate swaps to reduce the risk that an increase in short-term interest rates could reduce common share net earnings as a result of leverage. Under the terms of the interest rate swaps, the Fund agrees to pay the swap counterparty a fixed-rate payment in exchange for the counterparty’s paying the Fund a variable-rate payment that is intended to approximate all or a portion of the Fund’s variable-rate payment obligations on the Fund’s Private Securities. The fixed-rate and variable-rate payment flows are netted against each other, with the difference being paid by one party to the other on a monthly basis. The Fund segregates cash or liquid securities having a value at least equal to the Fund’s net payment obligations under any interest rate swap transaction, marked to market daily. There is no guarantee that these interest rate swap transactions will be successful in reducing or limiting risk.

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Risks may arise if the counterparty to a swap contract fails to comply with the terms of its contract. The loss incurred by the failure of a counterparty is generally limited to the net interest payment to be received by the Fund and/or the termination value at the end of the contract. Additionally, risks may arise if there is no liquid market for these agreements or from movements in interest rates unanticipated by Management. Periodic expected interim net interest payments or receipts on the swaps are recorded as an adjustment to unrealized gains/losses, along with the fair value of the future periodic payment or receivable streams on the swaps. The unrealized gains/losses associated with the periodic interim net interest payments or receipts are reclassified to realized gains/losses in conjunction with the actual net receipt or payment of such amounts. The reclassifications do not impact the Fund’s total net assets applicable to common stockholders or its total net increase (decrease) in net assets applicable to common stockholders resulting from operations. Certain clearinghouses currently offer clearing for limited types of derivative transactions. In a cleared derivative transaction, a fund typically enters into the transaction with a financial institution counterparty that is then cleared through a central clearinghouse. Upon acceptance of a swap by a central clearinghouse, the original swap is extinguished and replaced with a swap with the clearinghouse, thereby reducing or eliminating the fund’s exposure to the credit risk of the original counterparty. A fund typically will be required to post specified levels of both initial and variation margin with the clearinghouse or at the instruction of the clearinghouse. The daily change in valuation is recorded as a receivable or payable for variation margin and settled in cash with the centrally clearing party. For financial reporting purposes, unamortized upfront payments, if any, are netted with unrealized appreciation or depreciation and net interest received or paid on swap contracts to determine the fair value of swaps. At April 30, 2017, the Fund had the following derivatives (which did not qualify for hedge accounting under ASC 815), grouped by primary risk exposure:

Asset Derivatives		Interest Rate Risk		Statement of Assets and Liabilities Location
Centrally Cleared Interest Rate Swaps		$1,391,900		Receivable/Payable for variation margin on centrally cleared
				interest rate swaps(a)
Total Value - Assets		$1,391,900
Liability Derivatives		Interest Rate Risk		Statement of Assets and Liabilities Location
Centrally Cleared Interest Rate Swaps		$(96,944)		Receivable/Payable for variation margin on centrally cleared
				interest rate swaps(a)
Total Value - Liabilities		$(96,944)

(a)

“Centrally Cleared Interest Rate Swaps” reflects cumulative unrealized appreciation or (depreciation). Only the current day’s variation margin on open centrally cleared interest rate swaps is reported within the Statement of Assets and Liabilities as “Receivable for variation margin on centrally cleared interest rate swaps (Note A).”

The impact of the use of these derivative instruments on the Statement of Operations during the six months ended April 30, 2017, was as follows:

Realized Gain (Loss)
		Interest Rate Risk		Statement of Operations Location
Interest Rate Swaps		$(136,188)		Net realized gain (loss)
Total Realized Gain (Loss)		$(136,188)		on: interest rate swaps
Change in Appreciation/(Depreciation)
		Interest Rate Risk		Statement of Operations Location
Interest Rate Swaps		$1,279,515		Change in net unrealized appreciation/
Total Change in Appreciation/(Depreciation)		$1,279,515		(depreciation) in value of: interest rate swaps

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	The Fund adopted the provisions of Accounting Standards Update (“ASU”) 2011-11 Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 is intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. Pursuant to ASU 2011-11, an entity is required to disclose both gross and net information for assets and liabilities related to derivatives, repurchase and reverse repurchase agreements, and securities lending and securities borrowing transactions that are eligible for offset or subject to an enforceable master netting or similar agreement. At April 30, 2017, the Fund had no derivatives eligible for offset or subject to an enforceable master netting or similar agreement.
11	Indemnifications: Like many other companies, the Fund’s organizational documents provide that its officers (“Officers”) and directors (“Directors”) are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, both in some of its principal service contracts and in the normal course of its business, the Fund enters into contracts that provide indemnifications to other parties for certain types of losses or liabilities. The Fund’s maximum exposure under these arrangements is unknown as this could involve future claims against the Fund.
12	Arrangements with certain non-affiliated service providers: In order to satisfy rating agency requirements and the terms of the Private Securities, the Fund is required to provide the rating agency and holders of Private Securities a report on a monthly basis verifying that the Fund is maintaining eligible assets having a discounted value equal to or greater than the basic maintenance amount, which is the minimum level set by the rating agency as one of the conditions to maintain the AAA rating on the New PNs and the AA rating on the MRPS. “Discounted value” refers to the fact that the rating agency requires the Fund, in performing this calculation, to discount portfolio securities below their face value, at rates determined by the rating agency. The Fund pays State Street Bank and Trust Company (“State Street”) for the preparation of this report, which is reflected in the Statement of Operations under the caption “Basic maintenance expense (Note A).”
Note B—Investment Management Fees, Administration Fees, and Other Transactions with Affiliates:
	The Fund retains Management as its investment manager under a Management Agreement. For such investment management services, the Fund pays Management a fee computed at an annual rate of 0.60% of the Fund’s average daily Managed Assets. Managed Assets equal the total assets of the Fund, less liabilities other than the aggregate indebtedness entered into for purposes of leverage. For purposes of calculating Managed Assets, the Liquidation Value of any MRPS (PPS prior to September 2013) outstanding and borrowings under the New PNs (PNs prior to September 2013) are not considered liabilities. The Fund retains Management as its administrator under an Administration Agreement. The Fund pays Management an administration fee at the annual rate of 0.05% of its average daily Managed Assets under this agreement. Additionally, Management retains State Street as its sub-administrator under a Sub-Administration Agreement. Management pays State Street a fee for all services received under the agreement. Prior to January 1, 2016, Neuberger Berman Fixed Income LLC was the sub-adviser to the Fund, retained by Management pursuant to a Sub-Advisory Agreement to be responsible for developing, implementing and supervising the Fund’s investment program and providing certain administrative services to the Fund, and received a monthly fee paid by Management. Several individuals who are Officers and/or Directors of the Fund are also employees of Management. In April 2016, the Fund recorded a capital contribution from a portfolio manager in the amount of $2,435. This amount was paid in accordance with Section 16(b) of the Securities Exchange Act of 1934, as amended.

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Note C—Securities Transactions:
	During the six months ended April 30, 2017, there were purchases and sales of long-term securities (excluding interest rate swap contracts) of $132,160,515 and $130,473,641, respectively.
Note D—Legal Matters:
	On June 1, 2015, the Fund was served with a lawsuit filed in the United States Bankruptcy Court for the Southern District of New York, entitled Motors Liquidation Company Avoidance Action Trust vs. JPMorgan Chase Bank, N.A. et al. and numbered Adv. No. 09-00504 (MG). In addition to the Fund, the lawsuit also names over five hundred other institutional investors as defendants. The lawsuit does not allege any misconduct by the defendants, but seeks to recover payments made by General Motors Corporation (n/k/a Motors Liquidation Company) and its affiliates (collectively, “GM”) to the defendants shortly prior to and after GM’s Chapter 11 bankruptcy filing on June 1, 2009 (the “Petition Date”). The complaint alleges that GM made the payments to the defendants under a certain term loan agreement, dated as of November 29, 2006, as amended by that first amendment dated as of March 4, 2009 (the “Term Loan Agreement”); that the payments occurred both during the ninety (90) days prior to the Petition Date (the “Prepetition Transfer”) and after the Petition Date when all amounts due under the Term Loan Agreement were paid in full in connection with GM’s postpetition financing (the “Postpetition Transfer”); that the lien purportedly securing the Term Loan Agreement was not perfected as of the Petition Date; and that the lenders under the Term Loan Agreement should therefore have been treated as unsecured creditors rather than paid in full as secured creditors. The plaintiff seeks avoidance of the lien securing the Term Loan Agreement as unperfected under Section 544(a) of the Bankruptcy Code; disgorgement of all amounts paid to the defendants as Postpetition Transfer (plus interest) under Section 549 of the Bankruptcy Code; and disallowance of any bankruptcy claims of the defendants against GM until they repay all such amounts under Section 502(d) of the Bankruptcy Code. On November 17, 2016, all claims against the Fund relating to the Prepetition Transfer were dismissed from the action. On May 5, 2017, the Bankruptcy Court concluded the evidentiary portion of a trial on certain legal issues with respect to the defendants’ right to the Postpetition Transfer, closing arguments are scheduled for June 5, 2017. During 2009, the Fund received pay downs from GM in connection with the term loan totaling approximately $3.0 million. The Fund cannot predict the outcome of the lawsuit. If the lawsuit were to be decided or settled in a manner adverse to the Fund, the payment of such judgment or settlement could have an adverse effect on the Fund’s net asset value. However, no liability for litigation relating to this matter has been accrued in the financial statements as neither the likelihood nor the amount of any liability can reasonably be determined at this time. The Fund will incur legal expenses associated with the defense of the lawsuit.
Note E—Custodian Out-of-Pocket Expenses Refunded:
	In May 2016, the Fund’s custodian, State Street, announced that it had identified inconsistencies in the way in which the Fund was invoiced for categories of expenses, particularly those deemed “out-of-pocket” costs, from 1998 through November 2015. The amounts in the table below represent the refunded expenses and interest determined to be payable to the Fund for the period in question. These amounts were refunded to the Fund by State Street during the period ended April 30, 2017.

Expenses		Interest Paid to
Refunded		the Fund
$51,210		$3,677

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Note F—Recent Accounting Pronouncements:
	In October 2016, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the impact, if any, that the adoption of the amendments to Regulation S-X will have on the Fund’s financial statements and related disclosures. During the six months ended April 30, 2017, the Fund adopted the FASB’s ASU No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs. Pursuant to the new standard, the Fund is required to present debt issuance costs in its Statement of Assets and Liabilities as a direct deduction from the carrying value of the related debt liability. Prior to the change, such costs were presented by the Fund as a deferred asset. This change in accounting had no impact on the Fund’s net assets. In December 2016, FASB issued ASU No. 2016-19, “Technical Corrections and Improvements” (“ASU 2016-19”). The guidance includes an amendment to Topic 820, Fair Value Measurement, which clarifies the difference between a valuation approach and a valuation technique. The amendments also require an entity to disclose when it has changed either a valuation approach and/or a valuation technique. The guidance is effective for interim and annual reporting periods beginning after December 15, 2016. Management is currently evaluating the impact, if any, of applying this guidance. On August 26, 2016, FASB issued a new ASU No. 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB’s Emerging Issues Task Force” (“ASU 2016-15”). ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The types of transactions addressed in ASU 2016-15 are debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, distributions received from equity method investees, and beneficial interests in securitization transactions. The amendments also clarify how the predominance principle should be applied. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Management is currently evaluating the impact, if any, of applying this provision. In November 2016, FASB issued a new ASU No. 2016-18, “Statement of Cash Flows (Topic 230), Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows show the changes during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Management is currently evaluating the impact, if any, of applying this guidance.
Note G—Unaudited Financial Information:
	The financial information included in this interim report is taken from the records of the Fund without audit by an independent registered public accounting firm. Annual reports contain audited financial statements.

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High Yield Strategies Fund Inc.

The following table includes selected data for a share of common stock outstanding throughout each period and other performance information derived from the Financial Statements. Amounts that do not round to $0.01 or $(0.01) per share are presented as $0.00 or $(0.00), respectively. Ratios that do not round to 0.01% or (0.01)% are presented as 0.00% or (0.00)%, respectively. A “-” indicates that the line item was not applicable in the corresponding period.

		Six Months
		Ended April 30,
		2017								Year Ended October 31,
		(Unaudited)				2016				2015				2014				2013				2012
Common Stock Net Asset Value,
Beginning of Period		$	13.12			$	12.68			$	14.42			$	14.67			$	14.03			$	13.00
Income From Investment Operations
Applicable to Common Stockholders:
Net Investment Income (Loss)@			0.45				0.92				1.02				1.10				1.15				1.17
Net Gains or Losses on Securities
(both realized and unrealized)			0.36				0.48				(1.75	)			(0.27	)			0.61				1.03
Common Stock Equivalent of Distributions
to MRPS Preferred Stockholders From:
Net Investment Income@			—				—				—				—				(0.04	)			(0.05	)
Total From Investment Operations
Applicable to Common Stockholders			0.81				1.40				(0.73	)			0.83				1.72				2.15
Less Distributions to Common
Stockholders From:
Net Investment Income			(0.47	)			(0.90	)			(0.94	)			(1.08	)			(1.08	)			(1.12	)
Tax Return of Capital			—				(0.06	)			(0.07	)			—				—				—
Total Distributions to
Common Stockholders			(0.47	)			(0.96	)			(1.01	)			(1.08	)			(1.08	)			(1.12	)
Voluntary Contribution
from Management			—				0.00				—				0.00				—				—
Common Stock Net Asset Value,
End of Period		$	13.46			$	13.12			$	12.68			$	14.42			$	14.67			$	14.03
Common Stock Market Value,
End of Period		$	12.05			$	11.61			$	10.69			$	13.16			$	13.56			$	14.18
Total Return, Common Stock
Net Asset Value†			6.76	%a *			13.08	%ab			(4.23	)%			6.48	%b			13.18	%			17.24	%
Total Return, Common Stock
Market Value†			8.00	%a *			18.69	%ab			(11.53	)%			5.13	%b			3.51	%			13.68	%
Supplemental Data/Ratios††
Net Assets Applicable to Common
Stockholders, End of Period (in millions)		$	263.0			$	256.4			$	247.8			$	281.7			$	286.7			$	274.1
Preferred Stock Outstanding,
End of Period (in millions) ^		$	35.0			$	35.0			$	35.0			$	35.0			$	35.0			$	27.2
Preferred Stock Liquidation
Value Per Share		$	25,000			$	25,000			$	25,000			$	25,000			$	25,000			$	25,000
Ratios are Calculated Using Average
Net Assets Applicable to
Common Stockholders
Ratio of Gross ExpensesØØ			2.43	%**			2.39	%			2.02	%			1.89	%			1.73	%			1.81	%#
Ratio of Net ExpensesØØ			2.41	%**c			2.39	%			2.02	%			1.89	%			1.73	%Ø			1.76	%Ø
Ratio of Net Investment Income
(Loss) Excluding MRPS Preferred
Stock Distributions			6.87	%**c			7.53	%			7.46	%			7.47	%			8.02	%			8.79	%
Portfolio Turnover Rate			35	%*			57	%			54	%			60	%			69	%			94	%
Asset Coverage Per Share, of Preferred
Stock, End of Period¢		$	212,968			$	208,182			$	202,029			$	226,286			$	229,815			$	277,268
Notes Payable (in millions)		$	89.9	^^		$	90.0			$	90.0			$	90.0			$	90.0			$	83.0
Asset Coverage Per $1,000 of
Notes Payable ¢¢		$	4,313			$	4,238			$	4,143			$	4,520			$	4,575			$	4,649

See Notes to Financial Highlights

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Notes to Financial Highlights (Unaudited)

†		Total return based on per share NAV reflects the effects of changes in NAV on the performance of the Fund during each fiscal period. Total return based on per share market value assumes the purchase of shares of common stock at the market price on the first day and sale of common stock at the market price on the last day of the period indicated. Distributions, if any, are assumed to be reinvested at prices obtained under the Fund’s distribution reinvestment plan. Results represent past performance and do not indicate future results. Current returns may be lower or higher than the performance data quoted. Investment returns may fluctuate and shares of common stock when sold may be worth more or less than original cost. Total return would have been lower if Management had not waived certain expenses during certain of the periods shown. Total return would have been the same for each of the respective years if the Fund had not received the refund listed in Note E of the Notes to Financial Statements
#		Represents the annualized ratios of net expenses to average daily net assets if Management had not waived a portion of the investment management fee.
@		Calculated based on the average number of shares of common stock outstanding during each fiscal period.
††		Expense ratios do not include the effect of distribution payments to PPS stockholders outstanding. Income ratios include income earned on assets attributable to Private Securities (PPS and PNs prior to September 18, 2013) outstanding.
^		From August 6, 2010 to September 17, 2013, the Fund had 1,087 PPS outstanding. Since September 18, 2013, the Fund has 1,400 MRPS outstanding (see Note A to Financial Statements).
^^		During the six months ended April 30, 2017, the Fund adopted FASB’s Accounting Standards Update No. 2015-03. At April 30, 2017, the value of Notes Payable is being shown net of unamortized deferred issuance costs of $144,363.
*		Not annualized.
**		Annualized.
ØØ		Interest expense is included in expense ratios. The annualized ratios of interest expense to average net assets applicable to common stockholders were:

Six Months
Ended
April 30,		Year Ended October 31,
2017		2016		2015		2014		2013		2012
0.77%		0.68%		0.51%		0.46%		0.58%		0.69%

Ø		Prior to January 1, 2013, the Fund had an expense offset arrangement in connection with its custodian contract. The impact of expense reductions related to expense offset arrangements, if any, was less than 0.01%.
¢		Calculated by subtracting the Fund’s total liabilities (excluding the liquidation preference of MRPS and accumulated unpaid distributions on MRPS (PPS prior to September 18, 2013)) from the Fund’s total assets and dividing by the number of MRPS/PPS outstanding.
¢¢		Calculated by subtracting the Fund’s total liabilities (excluding the liquidation preference of MRPS (PPS prior to September 18, 2013)), the outstanding principal of New PNs (PNs prior to September 18, 2013) and accumulated unpaid liabilities on Private Securities (PPS and PNs prior to September 18, 2013) from the Fund’s total assets and dividing by the outstanding Notes payable balance.
a		The class action proceeds listed in Note A of the Notes to Financial Statements had no impact on the Fund’s total return for the six months ended April 30, 2017.
		The class action proceeds received in 2016 had no impact on the Fund’s total return for the year ended October 31, 2016.

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b		The payments by affiliates received in 2014 and 2016 had no impact on the Fund’s total returns for the years ended October 31, 2014 and October 31, 2016, respectively.
c		Custodian Out-of-Pocket Expenses Refunded, as listed in Note E of the Notes to Financial Statements, which is non-recurring, is included in these ratios on a non-annualized basis. Had the Fund not received the refund, the annualized ratios of net expenses to average net assets applicable to common stockholders and net investment income/(loss) to average net assets applicable to common stockholders would have been:

Ratio of		Ratio of
Net Expenses to Average		Net Investment Income/(Loss) to
Net Assets Applicable to		Average Net Assets Applicable
Common Stockholders		to Common Stockholders
Six Months Ended		Six Months Ended
April 30, 2017		April 30, 2017
2.43%		6.85%

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Distribution Reinvestment Plan

American Stock Transfer & Trust Company, LLC (the “Plan Agent”) will act as Plan Agent for stockholders who have not elected in writing to receive dividends and distributions in cash (each a “Participant”), will open an account for each Participant under the Distribution Reinvestment Plan (“Plan”) in the same name as their then-current shares of the Fund’s common stock (“Shares”) are registered, and will put the Plan into effect for each Participant as of the first record date for a dividend or capital gains distribution.

Whenever the Fund declares a dividend or distribution with respect to the Shares, each Participant will receive such dividends and distributions in additional Shares, including fractional Shares acquired by the Plan Agent and credited to each Participant’s account. If on the payment date for a cash dividend or distribution, the net asset value is equal to or less than the market price per Share plus estimated brokerage commissions, the Plan Agent shall automatically receive such Shares, including fractions, for each Participant’s account. Except in the circumstances described in the next paragraph, the number of additional Shares to be credited to each Participant’s account shall be determined by dividing the dollar amount of the dividend or distribution payable on their Shares by the greater of the net asset value per Share determined as of the date of purchase or 95% of the then-current market price per Share on the payment date.

Should the net asset value per Share exceed the market price per Share plus estimated brokerage commissions on the payment date for a cash dividend or distribution, the Plan Agent or a broker-dealer selected by the Plan Agent shall endeavor, for a purchase period lasting until the last business day before the next date on which the Shares trade on an “ex-dividend” basis, but in no event, except as provided below, more than 30 days after the payment date, to apply the amount of such dividend or distribution on each Participant’s Shares (less their pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of such dividend or distribution) to purchase Shares on the open market for each Participant’s account. No such purchases may be made more than 30 days after the payment date for such dividend or distribution except where temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities laws. If, at the close of business on any day during the purchase period the net asset value per Share equals or is less than the market price per Share plus estimated brokerage commissions, the Plan Agent will not make any further open-market purchases in connection with the reinvestment of such dividend or distribution. If the Plan Agent is unable to invest the full dividend or distribution amount through open-market purchases during the purchase period, the Plan Agent shall request that, with respect to the uninvested portion of such dividend or distribution amount, the Fund issue new Shares at the close of business on the earlier of the last day of the purchase period or the first day during the purchase period on which the net asset value per Share equals or is less than the market price per Share, plus estimated brokerage commissions, such Shares to be issued in accordance with the terms specified in the third paragraph hereof. These newly issued Shares will be valued at the then-current market price per Share at the time such Shares are to be issued.

For purposes of making the reinvestment purchase comparison under the Plan, (a) the market price of the Shares on a particular date shall be the last sales price on the New York Stock Exchange (or if the Shares are not listed on the New York Stock Exchange, such other exchange on which the Shares are principally traded) on that date, or, if there is no sale on such Exchange (or if not so listed, in the over-the-counter market) on that date, then the mean between the closing bid and asked quotations for such Shares on such Exchange on such date and (b) the net asset value per Share on a particular date shall be the net asset value per Share most recently calculated by or on behalf of the Fund. All dividends, distributions and other payments (whether made in cash or Shares) shall be made net of any applicable withholding tax.

Open-market purchases provided for above may be made on any securities exchange where the Fund’s Shares are traded, in the over-the-counter market or in negotiated transactions and may be on such terms as to price, delivery and otherwise as the Plan Agent shall determine. Each Participant’s uninvested funds held by the Plan Agent will not bear interest, and it is understood that, in any event, the Plan Agent shall have no liability in connection with any inability to purchase Shares within 30 days after the initial date of such purchase as herein provided, or with the timing of any purchases effected. The Plan Agent shall have no responsibility as to the value of the Shares acquired for each

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Participant’s account. For the purpose of cash investments, the Plan Agent may commingle each Participant’s funds with those of other stockholders of the Fund for whom the Plan Agent similarly acts as agent, and the average price (including brokerage commissions) of all Shares purchased by the Plan Agent as Plan Agent shall be the price per Share allocable to each Participant in connection therewith.

The Plan Agent may hold each Participant’s Shares acquired pursuant to the Plan together with the Shares of other stockholders of the Fund acquired pursuant to the Plan in noncertificated form in the Plan Agent’s name or that of the Plan Agent’s nominee. The Plan Agent will forward to each Participant any proxy solicitation material and will vote any Shares so held for each Participant only in accordance with the instructions set forth on proxies returned by the Participant to the Fund.

The Plan Agent will confirm to each Participant each acquisition made for their account as soon as practicable but not later than 60 days after the date thereof. Although each Participant may from time to time have an undivided fractional interest (computed to three decimal places) in a Share, no certificates for a fractional Share will be issued. However, dividends and distributions on fractional Shares will be credited to each Participant’s account. In the event of termination of a Participant’s account under the Plan, the Plan Agent will adjust for any such undivided fractional interest in cash at the market value of the Shares at the time of termination, less the pro rata expense of any sale required to make such an adjustment.

Any Share dividends or split Shares distributed by the Fund on Shares held by the Plan Agent for Participants will be credited to their accounts. In the event that the Fund makes available to its stockholders rights to purchase additional Shares or other securities, the Shares held for each Participant under the Plan will be added to other Shares held by the Participant in calculating the number of rights to be issued to each Participant.

The Plan Agent’s service fee for handling capital gains and other distributions or income dividends will be paid by the Fund. Participants will be charged their pro rata share of brokerage commissions on all open-market purchases. Each Participant may terminate their account under the Plan by notifying the Plan Agent in writing. Such termination will be effective immediately if the Participant’s notice is received by the Plan Agent not less than ten days prior to any dividend or distribution record date, otherwise such termination will be effective the first trading day after the payment date for such dividend or distribution with respect to any subsequent dividend or distribution. The Plan may be terminated by the Plan Agent or the Fund upon notice in writing mailed to each Participant at least 30 days prior to any record date for the payment of any dividend or distribution by the Fund.

These terms and conditions may be amended or supplemented by the Plan Agent or the Fund at any time or times but, except when necessary or appropriate to comply with applicable law or the rules or policies of the SEC or any other regulatory authority, only by mailing to each Participant appropriate written notice at least 30 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted by each Participant unless, prior to the effective date thereof, the Plan Agent receives written notice of the termination of their account under the Plan. Any such amendment may include an appointment by the Plan Agent in its place and stead of a successor Plan Agent under these terms and conditions, with full power and authority to perform all or any of the acts to be performed by the Plan Agent under these terms and conditions. Upon any such appointment of any Plan Agent for the purpose of receiving dividends and distributions, the Fund will be authorized to pay to such successor Plan Agent, for each Participant’s account, all dividends and distributions payable on Shares held in their name or under the Plan for retention or application by such successor Plan Agent as provided in these terms and conditions.

The Plan Agent shall at all times act in good faith and agrees to use its best efforts within reasonable limits to ensure the accuracy of all services performed under this Agreement and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by the Plan Agent’s negligence, bad faith, or willful misconduct or that of its employees. These terms and conditions are governed by the laws of the State of Maryland.

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Reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions — i.e., reinvestment in additional Shares does not relieve stockholders of, or defer the need to pay, any income tax that may be payable (or that is required to be withheld) on Fund dividends and distributions. Participants should contact their tax professionals for information on how the Plan impacts their personal tax situation. For additional information about the Plan, please contact the Plan Agent by telephone at 1-866-227-2136 or by mail at 6201 15th Avenue, Brooklyn, NY, 11219 or online at www.astfinancial.com.

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Directory

Investment Manager and Administrator		Plan Agent
Neuberger Berman Investment Advisers LLC		American Stock Transfer & Trust Company, LLC*
1290 Avenue of the Americas		Plan Administration Department
New York, NY 10104-0002		P.O. Box 922
877.461.1899 or 212.476.8800		Wall Street Station
		New York, NY 10269-0560
Custodian
State Street Bank and Trust Company		Overnight correspondence should be sent to:
One Lincoln Street		American Stock Transfer & Trust Company, LLC*
Boston, MA 02111		6201 15th Avenue
		Brooklyn, NY 11219
Transfer Agent
American Stock Transfer & Trust Company, LLC*		Legal Counsel
6201 15th Avenue		K&L Gates LLP
Brooklyn, NY 11219		1601 K Street, NW
		Washington, DC 20006-1600
Computershare, Inc. (As of April 30, 2017)
480 Washington Boulevard		Independent Registered Public Accounting Firm
Jersey City, NJ 07310		Ernst & Young LLP
		200 Clarendon Street
		Boston, MA 02116

*

Prior to June 13, 2017, Computershare, Inc. served as the Fund’s Transfer Agent and Plan Agent. Effective June 13, 2017, American Stock Transfer & Trust Company, LLC became the Fund’s Transfer Agent and Plan Agent.

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Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling 800-877-9700 (toll-free) and on the Securities and Exchange Commission’s website, at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is also available upon request, without charge, by calling 800-877-9700 (toll-free), on the Securities and Exchange Commission’s website at www.sec.gov, and on Management’s website at www.nb.com.

Quarterly Portfolio Schedule

The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Securities and Exchange Commission’s website at www.sec.gov and may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. The information on Form N-Q is available upon request, without charge, by calling 800-877-9700 (toll-free).

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FACTS	WHAT DOES NEUBERGER BERMAN DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: ◼Social Security number and account balances ◼income and transaction history ◼credit history and credit scores When you are no longer our customer, we continue to share your information as described in this notice.
How?	All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Neuberger Berman chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does Neuberger Berman share?	Can you limit this sharing?
For our everyday business purposes— such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes— to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don’t share
For our affiliates’ everyday business purposes— information about your transactions and experiences	Yes	No
For our affiliates’ everyday business purposes— information about your creditworthiness	No	We don’t share
For nonaffiliates to market to you	No	We don’t share

Questions?	Call 800.223.6448

This is not part of the Fund’s stockholder report.

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Who we are
Who is providing this notice?	Entities within the Neuberger Berman family of companies, mutual funds, and private investment funds.
What we do
How does Neuberger Berman protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We restrict access to customer information to those employees who need to know such information in order to perform their job responsibilities.
How does Neuberger Berman collect my personal information?	We collect your personal information, for example, when you ◼open an account or provide account information ◼seek advice about your investments or give us your income information ◼give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only ◼sharing for affiliates’ everyday business purposes—information about your creditworthiness ◼affiliates from using your information to market to you ◼sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ◼Our affiliates include companies with a Neuberger Berman name; financial companies, such as investment advisers, broker dealers; mutual funds, and private investment funds.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ◼Nonaffiliates we share with can include companies that perform administrative services on our behalf (such as vendors that provide data processing, transaction processing, and printing services) or other companies such as brokers, dealers, or counterparties in connection with servicing your account.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ◼Neuberger Berman doesn’t jointly market.

This is not part of the Fund’s stockholder report.

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				Neuberger Berman Investment Advisers LLC 1290 Avenue of the Americas New York, NY 10104-0002 Internal Sales & Services 877.461.1899 www.nb.com Statistics and projections in this report are derived from sources deemed to be reliable but cannot be regarded as a representation of future results of the Fund. This report is prepared for the general information of stockholders and is not an offer for shares of the Fund.  H0547 06/17

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