Highland Income Fund Series A Pfd 2024年度报告

CERTIFIED SHAREHOLDER REPORT OF REGISTEREDMANAGEMENT INVESTMENT COMPANIES InvestmentCompanyActfilenumber:811-23268 HIGHLAND OPPORTUNITIES AND INCOME FUND 300 Crescent CourtSuite 700Dallas, Texas 75201(Address of principal executive offices) (Zip code) NexPoint Asset Management, L.P.300 Crescent CourtSuite 700Dallas, Texas 75201(Name and Address of Agent for Service) Registrant’s telephonenumber,includingareacode:(800)357-9167 Date of fiscal year end: December31 Date of reporting period: December31, 2024 Table of Contents Item 1.Reports to Stockholders. (a)A copy of the Annual Report transmittedtoshareholderspursuanttoRule30e-1undertheInvestmentCompanyAct of 1940, asamended (the “1940 Act”), is attached herewith. DECEMBER31, 2024 ANNUAL REPORT Highland Opportunities and Income Fund Highland Opportunities and Income FundTABLE OF CONTENTS Portfolio Manager CommentaryFund ProfileFinancial StatementsInvestment PortfolioStatement of Assets and LiabilitiesStatement of OperationsStatements of Changes in Net AssetsStatement of Cash FlowsFinancial HighlightsNotes to Financial StatementsReport of Independent Registered Public Accounting FirmAdditional InformationApproval of Investment Advisory AgreementTrustees and OfficersImportant Information About This Report Table of Contents Economic and market conditions change frequently.There is no assurance that the trends described in this report will continue or commence. Privacy Policy We recognize and respect your privacy expectations, whether you are a visitor to our web site, a potentialshareholder, a current shareholder or even a former shareholder. Collection of Information.We may collect nonpublic personal information about you from the following sources: •Account applications and other forms, which may include your name, address and social security number,written and electronic correspondence and telephone contacts;•Web site information, including any information captured through the use of “cookies”; and•Account history, including information about the transactions and balances in your accounts with us orouraffiliates. Disclosure of Information. We may share the information we collect with our affiliates. We may also disclose thisinformation as otherwise permitted by law. We do not sell your personal information to third parties for their independentuse. Confidentiality and Security of Information.We restrict access to nonpublic personal information about you to ouremployees and agents who need to know such information to provide products or services to you. We maintainphysical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personalinformation, although you should be aware that data protection cannot be guaranteed. A prospectus must precede or accompany this report. Please read the prospectus carefully before youinvest. Table of Contents Portfolio Manager Commentary(unaudited) HighlandOpportunitiesandIncomeFund(NYSE:HFRO) As of December31, 2024 Performance OverviewFor the twelve-month period ended December31, 2024, Highland Opportunities and Income Fund (the “Fund” or “HFRO”) experienced a total market price decline of -27.00% and a total NAV decrease of -2.36%. Over the same period, theFund’s benchmark, the Credit Suisse Leveraged Loan Index (the “Index”), returned +9.05%. CCS Medical Inc. (“CCS Medical”) was among the top contributors to performance during the year. The Fund’s exposureto commercial real estate was among the largest detractors to performance during the year, with IQHQ Inc. (“IQHQ”)being the largest single detractor in 2024. In 2024, the commercial real estate market exhibited a mix of recovery and challenges across various sectors. The officemarket faced significant hurdles, with vacancy rates reaching record highs. In July 2024, the national office vacancy ratestood at 13.8%(1), underscoring the sector’s ongoing struggles. This trend was influenced by the continued rise of hybridand remote work models during Covid, leading to increased vacancies and a decline in leasing activity. Conversely, theindustrial and retail sectors demonstrated resilience. The industrial market continued to benefit frome-commercegrowthand supply chain demands, maintaining strong fundamentals. Similarly, the retail sector showed signs of recovery, withincreased consumer spending and a resurgence inbrick-and-mortarretail activities. The multifamily sector remainedrobust, driven by sustained demand for rental housing amid elevated mortgage rates, which impacted housingaffordability. This demand contributed to an increase in apartment leasing and a steady increase in rents. In summary, 2024 was a year of mixed performance for the commercial real estate market, with certain sectors showingresilience and others facing significant challenges. The outlook for 2025 suggests a continued recovery, particularly inindustrial, retail, and multifamily sectors, the Fund’s focus, while the office market may