The Month In Closed-End Funds: December 2017

by: Tom Roseen


For the fourth month in a row, equity closed-end funds (CEFs) witnessed a plus-side return on average, rising 1.86% on a net asset value (NAV) basis for December.

While for the second month in three, their fixed-income CEF counterparts posted a return in the black, gaining 0.97%.

For December, only 16% of all CEFs traded at a premium to their NAV, with 17% of equity CEFs and 16% of fixed-income CEFs trading in premium territory.

Energy MLP CEFs (+7.87%) and Natural Resources CEFs (+6.82%) posted the strongest returns in the equity universe, propping up the domestic equity CEFs macro group (+2.25%).

For 2017, equity CEFs (+14.35%) and fixed-income CEFs (+7.98%) easily outpaced their 2016 returns.

For the month of December, 91% of all CEFs posted NAV-based returns in the black, with 83% of equity CEFs and 98% of fixed-income CEFs chalking up returns in the plus column. Except for Utility CEFs (-1.86%), all equity CEF classifications benefited from the positive stock environment and the passage of the tax reform bill in December, with the Energy MLP CEFs classification (+7.87%, November’s laggard) jumping to the top of the equity charts for the first month in 12. For the thirteenth month in a row, domestic taxable bond CEFs (+0.62%) posted a plus-side return on average but underperformed their municipal bond CEFs (+1.31%) and world income CEFs (+0.73%) cohorts. In this report, we highlight December 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.