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Actionable Items

  • Highest Positive Spread: BlackRock MuniHoldings Insured Fund II
  • Focus Stock: H&Q Healthcare Investors
  • Last Week's Focus Stock: Mexico Fund

Bernanke Trumps Sequester: The economic data appears to be going with Bernanke's easing of monetary policies. Housing, employment, banks on the mend, P/E ratios below the peak, retail investors underweighted in equity and DJIA's new highs, seem to be finding the economy's "sweet spot".

If the economy takes over from the massive easing of rates, the Fed will have temporarily reduced a juncture point for this economy. However, with the massive liquidity the Feds will have, interest rates will likely increase - whether they want to or not.

Commodities ETFs "went with the flow". Gold (NYSEARCA:GLD), Copper (NYSEARCA:JJC) and Oil (NYSEARCA:USO) expanded 0.2%, 0.1% and 0.9%, respectively - but unlike 2.2% for equity.

Drop Might be Likely: There may be a "drop" in the equity markets when the Republicans are unlikely to "cave" into plans for a sequester. Without the nation's tax increases or debt reductions (government programs), the national debt increases as we speak.

30 Year Rising: The 30 year interest rates may be rising. They have battered REITs: Simon Property Group (NYSE:SPG), -1.6%, Avalonbay Communities (NYSE:AVB), -2.1% and Federal Realty Investment Trust (NYSE:FRT), -1.5%. Cap rates may be more dependent on interest rates.

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Interest rates for taxable bonds (NYSEARCA:BND), muni bonds (NYSEARCA:MUB) and mortgage bonds (NYSEARCA:MBB) declined for the week. (See top illustrations.)

The ETFs: The ETF sectors are arranged in order on 3/8/13. Health Care, Mid-Cap and Financial were leaders. Currency, Bonds and Commodities were laggards.

CEF Weekly Fund Type Performance: This week's price rise for CEFs was equity-orientated. However, the price increase wasn't as aggressive as the NAV's.

The debt-oriented CEFs securities caused the laggards in the index. InvGrdBndFnds, SingleStMuniFnds and NatlMuniBndFnds dropped for the week (-1.3%, -1.2% and -1.2%, respectively). Bond funds' NAV were negative for the week.

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Highest Focus Stock for the Week: BlackRock MuniHoldings Insured Fund II (NYSE:MUE) was ahead by a price increase of +2.4% and NAV per share declined -1.7%. The PrcNAVSprd was +4.1% (positive number may be a decline for share price CEFs). Last week there was significant buying from Wednesday through Friday. These days were 148,967 on average. There was an average 3 months volume of 68,875.

Dividends per share were down 4.1% on a monthly basis to $0.0705 from $0.0735 on 9/12/12. Annualized dividend yield was 5.54% (8.52% on a taxable equivalent yield) and premium was 0.6% for an average discount of -0.27% for the 52 weeks. Its ex-date is on 2/27/13 for $0.37 per share (a short-term gain) on quarterly basis. The yield is 7.7%. Its discount is 6.1% for an average discount of 5.9% for the 52 week period. There was a slew of selling on Wednesday (284,200) and Thursday and Friday (129,500 and 179,000, respectively). Average is 38.6%.

Lowest Spread and Focus Stock for the Week: H&Q Healthcare Investors (NYSE:HQH) share price advanced +0.5% with a positive +3.3% from its NAV per share. Its PrcNAVSprd decline was -2.8%.Its ex-date is on 2/27/13 for $0.37 per share (a short-term gain) on quarterly basis. The yield is 7.7%. Its discount is 6.1% for an average discount of 5.9% for the 52 week period. There was a slew of selling on Wednesday (284,200) and Thursday and Friday (129,500 and 179,000, respectively).

Focus Stock & High Price for Last Week: Last two weeks' Focus stock for the week (last time we published) was Mexico Fund (NYSE:MXF) which was 8.1% for the week ending in 3/8/13.

Source: CEF Weekly Review: H&Q Health Care Investors