All CEF Fund Types Advanced Last Week

Summary: All closed end (CEF) fund types again advanced the week ending 4/17/09. Average price appreciation of 13 CEF fund types was 3.0%, while the unweighted average for all 646 CEFs was up 2.6%. The Claymore CEF Index, a smaller sample, large-cap weighted index was up 2.3%. (CEFs on an unweighted, aggregate basis are up 10.0% YTD; Distribution Yield is 10.1%; Discount to NAV was 8.6%.) Riskier fund types continued to be favored by CEF investors. The CBOE Volatility Index (VIX), the investor “fear gauge” declined 7.4% on top of an 8.0% drop the previous week. Special equity funds were up 5.3% and benefited from the surge in the real estate sector which makes up over 40% of this fund type. Loan Participation funds also gained 5.3%.

For sake of weekly comparison, SPDR S&P 500 (SPY) was up 1.5%. Vanguard Total Bond (BND) was down 0.2% while iShares Muni fund (MUB) was up 2.1%. Gold (GLD) continued its slide and dropped an additional 1.3%, while oil, as measure by the US Oil ETF (USO), tumbled 4.0%. Commercial real estate, as measured by Vanguard Real Estate Investment Trust ETF (VNQ), continued its three week climb, up 5.0%. During the month of April, VNQ is up 28%. Additional oversubscribed REIT equity offerings and talk regarding TALF extending loan maturities 5 years to include real estate CMBS conspired to drive the “shorts” crazy. After such a significant run up in the real estate sector, caution is advised.

RFR F.I.R.E. FUND (RFR) was one of the biggest CEF gainers for the week, up 17.4%. (RFR is involved in reorganization with sister CEFs subject to shareholders vote June 4^th) One of this week’s bigger losers, Evergreen Global Dividend Opportunity Fund (EOD) was down 6.9%.

Dislcosure: Long EOD, GLD, USO and SPY.