The Month In Closed-End Funds: October 2017

by: Tom Roseen


For the second month in a row equity closed-end funds (CEFs) witnessed a plus-side return on average, rising 0.14% on a net-asset-value (NAV) basis for October.

And for the third month in four their fixed income CEF counterparts posted a return in the black, gaining 0.33%.

For October 20% of all CEFs traded at a premium to their NAV, with 19% of equity CEFs and 20% of fixed income CEFs trading in premium territory.

Pacific ex-Japan CEFs (+4.65%) and Developed Markets CEFs(+1.99%) posted the strongest returns in the equity universe, propping up theworld equity CEFs (+1.50%) macro-group.

All but one of Lipper’s municipal debt CEF classifications posted returns in the black for October, with Pennsylvania Municipal Debt CEFs(-0.12%) being the group laggard.

For the month 74% of all CEFs posted NAV-based returns in the black, with 64% of equity CEFs and 81% of fixed income CEFs chalking up returns in the plus column. As a result of Prime Minister Shinzo Abe’s coalition’s winning a majority in Japan’s snap parliamentary election and with the ECB delivering a dovish QE plan, the Pacific-ex Japan CEFs classification (+4.65%) jumped to the top of the equity charts for the first month in five. And for the eleventh month in a row domestic taxable bond CEFs (+0.62%) posted a plus-side return on average, outpacing their municipal bond CEFs (+0.10%) and world income CEFs (+0.04%) counterparts, as the High Yield CEFs (Leveraged) classification (+0.80%) jumped to the head of the pack. In this report we highlight October 2017 CEF performance trends, premiums and discounts, and corporate actions and events.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.