Highest Positive Spread: Cornerstone Strategic Value Fund (CLM)
Focus Stock: Cohen & Steers Total Return Realty (RFI)
Last Week's Focus Stock: Nuveen Short Duration Credit Opportunities (JSD)
CEF Weekly Fund Type Performance: The SpecEqFnds spurted ahead by 1.7%. GenEqFnds, PrefStkFnds and LoanPartFnds were ahead by 1.4%. The laggard was InvGrdBndFnds as it dropped by negative 0.2%. Bringing up the rear was NatlMuniBndFnds, WrldEqFnds and SingleStMuniFnds with price appreciation +0.6%. InvGrdBndFnds was a PrcNAVSprd of -0.5% and USMrtgBndFnds a -0.3%.
Highest Focus Stock for the Week: Cornerstone Strategic Value Fund was ahead by price 4.2% and NAV per share was -0.9%. The PrcNAVSprd was 5.0% (positive number may be a decline for CEFs). The CLM ex-distribution ($0.1022 per share on a monthly basis) was Friday (January 11th). The two other distributions are for February and March.
Total distributions were down 7.8% from January to December 2012 and were at an 18.3% yield. If you're happy that your capital is returned to you, so be it. CLM premium is 15.8% and you're trading CEFs at a discount. But if you are paying for the distributions as a return-of-capital ("ROC") the investment doesn't make sense. However, at 15.8% premium, someone is surely making the assumptions.
Lowest Spread and Focus Stock for the Week: Cohen & Steers Total Return Realty share price declined -4.6% and its price was a negative 0.6% from its NAV per share; its PrcNAVSprd declined was -5.3%. The real estate fund has $125 million and has a yield of 5.9%.
The current premium is 11.8% well above its value in 2012. Real estate funds have sparkled this year and have and retained a special distribution above its usual December 19th distribution date. Its special distribution was $0.532 a share in December. Right now, the real estate funds are trading over the properties values (REIT) and the fund is trading over its premium. I might wait until the properties have come to the appropriate levels.
Last Week's Focus Stock: Last week we had Nuveen Short Duration Credit Opportunities. The stock was up 2.1% given its stock distribution from December 28th.
I am long RFI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.