Managed High Yield Plus Fund Inc. – Fund Commentary

Managed High Yield Plus Fund Inc. (NYSE: HYF) (the “Fund”) is a closed-end management investment company seeking high income, and secondarily, capital appreciation, primarily through investments in lower rated, income-producing debt and related equity securities.

Fund Commentary for the second quarter 2012 from UBS Global Asset Management (Americas) Inc. (“UBS Global AM”), the Fund’s investment manager

Market Review

The second quarter saw resilient performance from high yield markets, which delivered solid returns as market sentiment fluctuated. Initiatives to bolster financial markets, such as the Long-Term Refinancing Operation (LTRO) in the Eurozone, had improved risk appetite in the first quarter. In the second quarter, the effect of these efforts faded and economic data worsened as the outlook for growth deteriorated. In the high yield market, corporate fundamentals generally remained healthy, with liquidity levels and net leverage ratios at overall manageable levels, in our view. Primary market activity, although muted compared to the first quarter, remained robust, with some $50 billion in new issuance in the second quarter. Investor demand remained strong, with the asset class seeing inflows for the quarter, despite periodic outflows midway through the period. Defaults remained low and well below historical averages. During the second quarter, the US high yield market posted a return of 1.83%, as measured by the B of A Merrill Lynch US High Yield Cash Pay Constrained Index (the “Index). 1 The yield on the Index ended the quarter near historic lows at 7.20%. From a ratings perspective, better-quality ratings categories broadly outperformed lower-quality bonds, with the BB and B-rated segments outperforming the CCC- and below-rated segments.

Performance Review

For the second quarter of 2012, the Fund posted a net asset value total return of 1.74%, and a market price return of 2.21%. On a net asset value basis, the Fund modestly underperformed its benchmark, the Index, which returned 1.83% for the quarter.

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