NHS Neuberger Berman High Yield Strategies Fund

Dear Stockholder,

I am pleased to present this semi-annual report for Neuberger Berman High Yield Strategies Fund Inc. (the Fund) for the six months ended April 30, 2022 (the reporting period). 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.

As previously announced on December 15, 2021, Co-Portfolio Managers Russ Covode and Dan Doyle plan to retire from the asset management business on or about June 30, 2022 and will cease their portfolio management responsibilities at that time. Current Co-Portfolio Managers Joseph Lind and Christopher Kocinski, with an average of 19 years of industry experience, will continue to manage the Fund with the support of Neuberger Berman’s broader Non-Investment Grade Credit team following the retirements of Russ Covode and Daniel Doyle.

As previously announced, the Fund commenced a transferable rights offering (Offer) on April 19, 2022 (Record Date), whereby the Fund issued one transferable right (Right) for each share of common stock of the Fund (Common Stock) held by stockholders of record as of the Record Date. Holders of Rights were entitled to purchase Common Stock by submitting three Rights and the subscription price per share for each share purchased. The final subscription price of $8.60 per share of Common Stock was equal to 87% of the Fund’s net asset value per share of Common Stock at the close of trading on the NYSE American on May 17, 2022, the expiration date of the Offer. The Offer resulted in the issuance of 4,763,981 shares of Common Stock and the gross proceeds of the Offer were approximately $40.9 million.

Subsequent to the reporting period end, on June 3, 2022, the Fund completed a private placement of $26,500,000 via a Floating Rate Senior Note (Note) with a major unaffiliated financial institution. The Note pays interest based on a floating rate and matures in September 2023. The issuance of the Note increased the amount of leverage employed by the Fund in order to bring it more in line with the Fund’s asset level following the Offer.

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

Sincerely,

Joseph V. Amato
President and CEO
Neuberger Berman High Yield Strategies Fund Inc.

Neuberger Berman High Yield Strategies Fund Inc. (the Fund) generated a -10.97% total return on a net asset value (NAV) basis for the six-month period ended April 30, 2022 (the reporting period), underperforming its benchmark, the ICE BofA U.S. High Yield Constrained Index (the Index), which provided a -7.21% total return for the same period. (Fund performance on a market price basis is provided in the table immediately following this commentary.) The use of leverage (typically a performance enhancer in up markets and a detractor during market retreats) detracted from the Fund’s performance during the reporting period.

The overall high yield market, as measured by the Index, generated weak results, but outperformed all other longer duration fixed income categories during the reporting period. U.S. Treasury yields moved sharply higher as inflation hit a four-decade high, the U.S. Federal Reserve Board (Fed) indicated it would aggressively raise interest rates, and the tragic war in Ukraine triggered numerous supply shortages and fueled spikes in commodity prices. Meanwhile, consumer spending was generally resilient and the impact from COVID-19 and its variants appeared to wane. Concurrently, U.S. credit spreads widened given the risk aversion and the tightening of financial conditions.

From a sector perspective, security selection within the real estate & homebuilders and super retail sectors and security selection within and an overweight to the media-cable sector versus the Index detracted the most from results. In contrast, security selection within the diversified financial services, gas distribution, and health care sectors were the top contributors to relative performance.

In terms of the Fund’s portfolio credit quality, an underweight to not rated, security selection within CCC and below, and security selection within B were the primary detractors from performance. Conversely, security selection within and an underweight to BB, and an overweight to B rated issuers contributed the most to performance.

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

As it became increasingly clear that the Fed would have to become more aggressive with tightening monetary policy, thus creating more volatility, we selectively increased the Fund’s exposure to shorter duration and lower beta¹ (risk) BB rated issuers, while reducing some CCC and below and B rated issuers that had performed well. As credit spreads widened over the reporting period, we subsequently looked to decrease the Fund’s exposure to higher beta issuers, particularly in the CCC and below credit tier. Based on individual credit decisions and looking to reduce duration, the Fund’s BBB and above rated exposure also decreased over the reporting period.

Looking ahead, we believe current valuations present an attractive opportunity. While the Russia-Ukraine conflict and tightening of financial conditions are creating incremental volatility, real U.S. GDP growth is estimated to be around historical trend rates for 2022 and input costs for many issuers are being passed on to end markets. We believe that if real growth slows back toward trend it will help alleviate some of the inflationary pressures. Our analysts continue focus on the outlook for issuer margins given rising input costs. Mitigating this are strong consumer and business balance sheets, growing wages, solid jobs growth and businesses working to clear supply bottlenecks. While there is near zero direct exposure to Russia and Ukraine in the high yield market, our global research team continues to monitor the investment thesis for each issuer in the portfolio given the secondary impacts from the Russia-Ukraine conflict related to commodity prices and trade disruptions. Even with the heightened uncertainty, which is resulting in short-term volatility, we believe our bottom-up, fundamental credit research focused on security selection while seeking to avoid credit deterioration and putting only our “best ideas” into portfolios, position us well to take advantage of the increased volatility.

Sincerely,

Russ Covode, Daniel Doyle, Joe Lind and Chris Kocinski
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.

The performance of certain rated bonds within the Index, as noted above, represent issues that are rated Baa3/BBB- and above, Ba1/BB+ through Ba3/BB-, B1/B+ through B3/B- and Caa1/CCC+ or lower, based on an average of Moody’s, S&P Global and Fitch ratings, as calculated by ICE BofA.