Closed-End Funds: 3Q09 Flash Analysis

The average price change for the 13 CEF fund types for the 3^rd quarter ’09 was 15.5%. The unweighted average price change for the 617 CEFs was 16.5%. Both exceeded the S&P 500, as measured by the SPDRs’ ETF (SPY), of 14.8%.

LoanPartFnds and GenEqFnds were the percentage fund type leaders with approximately 21% price appreciation. USMrtgBndFnds was the laggards despite a respectable advance of 9.5%. GenEqFnds was pulled up by a small fund, Engex Inc. (EGX), which was the best performer for the 3Q, up 190.8%.

The best performing CEF sector was real estate, up 36.1%. While real estate funds are part of SpecEqFnds, that fund type was restrained by weak price performance of energy funds.

The worst performing CEF for the 3Q was First Trust Strategic High Income Fund (FHI), down 30.6%. During the 3Q, FHI slashed its monthly distribution from $.06 per share to $.025. The stock is trading at $2.72 per share with an 11% annualized distribution yield; its discount is 4.5%.

One of the CEFs with the largest discount at the end of 3Q was RENN Global Entrepreneurs Fund, (RCG). It was trading at a 25.4% discount. RCG, trading at $2.70 per share, is a micro CEF that itself invests in micro cap companies.

Two of the India CEFs demonstrated the largest negative PrcNAVSprd: MS India Investment (IIF) and India Fund Inc (IFN). (A negative PrcNAVSprd could under certain circumstance be viewed as positive as it represents the price increased less than the NAV.)

The following is a link to updated CEF charts for the end of September ’09. (Click here for monthly CEF charts.)

Disclosure: Long IFN

Comments

[oldman:]

any comments on FMY? has a negative duration, AAA, and about 7.5 yield and might be a good MM substitute>

Oct 07 04:22 PM