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I did a quick analysis to measure the performance of closed-end fund IPOs issued in 2009 that have been trading for at least six months:

Ticker Inception NAV Current NAV NAV Gain Inception Mkt Prc Current Mkr Prc MKT Gain Inception Date
NUW 14.30 16.24 +13.6% 15.0 16.26 +8.4% Feb. 2009
MTT 19.06 21.57 +13.2% 20.0 21.28 +6.4% Mar. 2009
NPN 14.30 15.32 +7.1% 15.0 15.49 +3.3% Apr. 2009
NJV 14.30 15.56 +8.8% 15.0 14.82 -1.2% Apr. 2009
NYV 14.30 15.55 +8.7% 15.0 14.63 -2.5% Apr. 2009
NCB 14.30 15.69 +9.7% 15.0 14.60 -2.7% Apr. 2009
EOT 19.10 21.18 +10.9% 20.0 19.82 -0.9% May 2009
IGI 19.06 20.62 +8.2% 20.0 19.91 -0.5% June 2009
TPZ 19.06 21.73 +14.0% 20.0 19.65 -1.8% July 2009

Avg Net Asset Value gain= +10.5% Avg Market price gain = +0.9%

There were nine IPOs that met the criteria, and in every case the market price performance was worse than the NAV performance. This was partially because of the embedded 5% commission that is built into the IPO price and partially because of the NAV discounts that developed.

Run of the mill closed-end funds can still be successfully marketed in spite of overwhelming evidence that they underperform their benchmarks the first year. Yet another example where an “efficient market” does not apply to closed-end funds.

Source: 2009 Closed-End Fund IPO Analysis