The Month In Closed-End Funds: November 2017

by: Tom Roseen

For the third month in a row equity closed-end funds (CEFs) witnessed a plus-side return on average, rising 0.78% on a net-asset-value (NAV) basis for November.

While for the second month in three their fixed income CEF counterparts posted a return in the red, losing 0.18%.

For November only 16% of all CEFs traded at a premium to their NAV, with 13% of equity CEFs and 18% of fixed income CEFs trading in premium territory.

Utility CEFs (+2.50%) and Core CEFs (+2.42%) posted the strongest returns in the equity universe, propping up the domestic equity CEFs (+0.94%) macro-group.

None of Lipper’s municipal debt CEF classifications posted returns in the black for November.

Traders work on the floor of the New York Stock Exchange, (NYSE) as a screen displays the Dow Jones Industrial Average as it crosses 24,000, in New York, U.S., November 30, 2017. REUTERS/Brendan McDermid

For November 48% of all CEFs posted NAV-based returns in the black, with 71% of equity CEFs and only 30% of fixed income CEFs chalking up returns in the plus column. Perhaps as a result of a more subdued view for 2018 interest rate hikes after the release of the FOMC’s October/November meeting minutes, interest rate-sensitive securities got a little bump in November, with the Utility CEFs classification (+2.50%) jumping to the top of the equity charts for the first month in nine. For the twelfth month in a row domestic taxable bond CEFs (+0.06%) posted a plus-side return on average, outpacing municipal bond CEFs (-0.45%) but underperforming world income CEFs (+0.17%). The Emerging Markets Debt CEFs (+0.24%) and Global Income CEFs (+0.14%) classifications helped propel the world income macro-group to the top of the podium. In this report we highlight November 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. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.