Weekly CEF Roundup: Fee Reductions At TSLF And EGIF

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Includes: AEF, ASA, BHV, BLE, BST, CAF, CCA, CHN, CIF, CLM, CRF, CXH, DDF, DEX, DSE, EEA, EFF, EFL, EFR, EGIF, EIA, EIM, EMI, ENX, ERC, EVG, EVM, EVN, EVV, FPL, FTF, GCV, GDV, GER, GF, GGO, GIM, GLO, GLQ, GLV, GMZ, GUT, HTY, ICB, IGA, IHD, KMM, MAB, MCR, MGF, MIN, MIW, MMT, MZF, NAV, NHF, NYH, OXLC, PIM, PMM, RCG, SMM, TSLF, VGI
by: Stanford Chemist
Summary

CEFs rebound. 16 and 13 out of 31 sectors positive by price and NAV respectively.

Management fee reductions at TSLF and EGIF.

VGI cuts distributions by -19.2%.

The Weekly CEF Roundup will be put out at the start of each week to summarize recent price movements in closed-end fund [CEF] sectors in the last week, as well as to highlight recently concluded or upcoming corporate actions on CEFs, such as tender offers. Most of the information has been sourced from CEFInsight or the Closed-End Fund Center. I will also link to some articles from Seeking Alpha that I have found for useful reading over the past week. The searchable tag for this feature is "cildoc." Data are taken from the close of Friday May 25, 2018.

Weekly performance roundup

16 out of 31 sectors were positive on price (up from 5 last week) and the average price return was -0.30% (up from -0.68%). Leading the pack was U.S. real estate (+2.04%), while MLPs reversed course and lagged (-5.33%).

(Source: Stanford Chemist, CEFConnect)

13 out of 31 sectors were positive on NAV (up from 5 last week), while the average NAV return was -0.24 (up from -0.65%). The NAV gainers and losers were similar to the price gainers and losers.

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium is multisector income (1.22%), while the sector with the highest discount is Latin American equity (-12.81%). The average sector discount is -6.61% (up from -6.62% last week).

(Source: Stanford Chemist, CEFConnect)

U.S. tax-advantaged equity showed the largest premium/discount increase (+1.12%), while MLPs showed the largest premium/discount decline (-1.62%). The average change in premium/discount was -0.06% (down from -0.03% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is U.S. covered call (+0.89) while the sector with the lowest z-score is Pennsylvania munis (-1.72). The average z-score is -0.51 (down from -0.47 last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest yield is MLPs (10.19%), followed by global growth & income (9.51%), emerging market income (9.28%), global equity dividend (8.88%) and multisector income (8.65%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is 6.85% (up from 6.80% last week).

(Source: Stanford Chemist, CEFConnect)

Individual CEFs that have undergone a significant decrease in premium/discount value over the past week, coupled optionally with an increasing NAV trend, a negative z-score, and/or are trading at a discount, are potential buy candidates.

Ticker

P/D decrease

Yield

P/D

z-score

Price change

NAV change

(FPL)

-5.71%

12.37%

2.62%

-0.2

-6.77%

-1.59%

(VGI)

-5.45%

10.71%

-3.02%

-1.2

-4.47%

0.90%

(RCG)

-4.93%

%

-1.85%

0.8

-7.63%

-2.99%

(GER)

-4.34%

10.11%

-0.16%

0.3

-9.31%

-5.37%

(GMZ)

-3.92%

9.53%

-3.82%

0.2

-7.65%

-3.88%

(OXLC)

-3.77%

14.74%

9.03%

1.3

-3.34%

0.00%

(GUT)

-3.76%

10.31%

16.87%

-1.8

0.52%

3.75%

(NHF)

-3.56%

10.84%

-15.82%

-3.2

-4.24%

-0.19%

(IHD)

-3.50%

8.45%

-7.01%

-0.6

-3.52%

0.11%

(BHV)

-3.36%

4.78%

4.77%

-1.4

-2.59%

0.53%

(Source: Stanford Chemist, CEFConnect)

Conversely, individual CEFs that have undergone a significant increase in premium/discount value in the past week, coupled optionally with a decreasing NAV trend, a positive z-score, and/or are trading at a premium, are potential sell candidates.

Ticker

P/D increase

Yield

P/D

z-score

Price change

NAV change

(CAF)

6.18%

4.47%

-7.61%

3.1

6.12%

-0.98%

(CLM)

5.61%

18.63%

19.08%

0.8

2.70%

-2.14%

(GGO)

5.40%

4.15%

-1.88%

2.0

5.02%

-0.76%

(CRF)

5.15%

18.30%

21.20%

0.7

2.31%

-2.05%

(BLE)

3.86%

5.45%

-1.85%

0.2

4.53%

0.41%

(BST)

3.52%

4.67%

7.81%

2.4

4.08%

0.68%

(GCV)

3.39%

7.75%

9.19%

1.5

2.84%

-0.35%

(HTY)

2.98%

10.15%

6.38%

0.5

1.76%

-1.09%

(IGA)

2.91%

7.70%

-3.94%

3.3

2.27%

-0.81%

(ASA)

2.81%

0.38%

-13.31%

0.5

0.10%

-3.14%

(Source: Stanford Chemist, CEFConnect)

Recent corporate actions

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

May 16, 2018 | The Gabelli Utility Trust (NYSE:GUT) (the “Fund”) is pleased to announce the successful completion of its transferable rights offering (the “Offering” or “Offer”) in which the Fund will issue 8,831,210 common shares, totaling $48,571,655. The Offering was significantly over-subscribed, with $92 million received. Approximately 62% of the primary shares were subscribed for in the primary subscription, and the remaining shares were subscribed for pursuant to the over-subscription privilege. The over-subscription requests exceeded the over-subscription shares available. As a result, the available over-subscription shares will be allocated pro rata among those fully exercising record date shareholders who over-subscribed based on the number of rights originally issued to them by the Fund. The Fund will return to those investors that submitted over-subscription requests the full amount of their excess payments. All of the common shares subscribed for will be issued on or about May 21, 2018. Any new common shares issued as a result of the Offer will not be record date shares for the Fund’s monthly distribution to be paid on May 23, 2018 and will not be entitled to receive such distribution.

May 4, 2018 | MFS Investment Grade Municipal Trust (the "fund") (CXH) announced today that, in accordance with its tender offer for up to 7.5 percent of the fund's outstanding common shares (the “shares”), which expired at 5:00 P.M., Eastern Time, on May 2, 2018, the fund has accepted 738,668 shares, representing 7.5 percent of shares, for payment on or about May 7, 2018. A total of 3,253,218.909609 shares were properly tendered and not withdrawn by May 2, 2018, the final date for withdrawals. Therefore, on a pro-rated basis, approximately 22.70783 percent of the shares so tendered by each shareholder have been accepted for payment. The purchase price of properly tendered shares is 98 percent of the fund's net asset value (NYSE:NAV) per share calculated as of the close of regular trading on the New York Stock Exchange on May 2, 2018, which is equal to $10.084 per share.

Upcoming corporate actions

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

May 11, 2018 | Managed Duration Investment Grade Municipal Fund ("MZF" or the "Fund") announced today that the Board of Trustees of the Fund (the "Board") has determined to submit a proposal to liquidate the Fund to a vote of all shareholders at a Special Meeting of Shareholders, which is scheduled to be held on July 12, 2018. In addition, the Board of Trustees has postponed the Fund's 2018 Annual Meeting of Shareholders previously scheduled for the same date. In determining to recommend liquidation of the Fund to shareholders, the Fund's investment adviser, Cutwater Investor Services Corp. (doing business as Insight Investment), and the Board considered a variety of factors and determined that a liquidation would be in the best interests of the Fund and its shareholders. In addition, the Fund's investment adviser entered into a standstill agreement with Karpus Investment Management, Inc. ("Karpus"), a large Fund shareholder, in connection with the proposed liquidation of the Fund. Under the terms of the agreement, Karpus has agreed, among other things, to withdraw its shareholder proposals and director nomination for the Fund's 2018 Annual Meeting of Shareholders. The Fund has been advised that Karpus will file a copy of the agreement with the Securities and Exchange Commission as an exhibit to its Schedule 13D.

May 11, 2018 | Aberdeen Emerging Markets Equity Income Fund, Inc. (the "Fund") (NYSE American: AEF) announced today that the Board of Directors of the Fund approved a tender offer by the Fund to acquire, in exchange for cash, up to 32% of the Fund's issued and outstanding shares at a price per share equal to 99% of the Fund's net asset value per share as determined by the Fund on the next business day following the expiration date of the tender offer (the "Tender Offer"). The Tender Offer will commence on or about May 22, 2018 and will expire at 11:59 p.m. New York City time on June 19, 2018, unless otherwise extended. The Tender Offer follows the consolidation of Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. ("ABE"), Aberdeen Israel Fund, Inc. ("ISL"), Aberdeen Indonesia Fund, Inc. ("IF"), Aberdeen Latin America Equity Fund, Inc. ("LAQ"), Aberdeen Singapore Fund, Inc. ("SGF"), Aberdeen Greater China Fund, Inc. ("GCH") and The Asia Tigers Fund, Inc. ("GRR") into the Fund, which closed on April 27, 2018. As previously announced, the Fund also anticipates making a special distribution, comprised of net realized capital gains. The capital gain distribution is currently estimated to represent approximately 9% of the Fund's net assets which, in combination with the tender offer, will represent an aggregate distribution of approximately 41% of the consolidated Fund assets as of the reorganization closing date of April 27, 2018. It is anticipated that the exact final amount of the capital gains distribution will be formally declared on June 4, 2018 and will be paid on June 28, 2018 to shareholders of record on June 15, 2018, so that tendering shareholders who hold shares on the record date will be entitled to receive the distribution.

April 26, 2018 | The Boards of Trustees of the Funds listed below have approved proposals to merge the Funds as follows:

Acquired Fund (Trading Symbol) Acquiring Fund (Trading Symbol)
Eaton Vance California Municipal Bond Fund II (EIA) Eaton Vance California Municipal Bond Fund (EVM)
Eaton Vance Massachusetts Municipal Bond Fund (MAB) Eaton Vance Municipal Bond Fund (EIM)
Eaton Vance Michigan Municipal Bond Fund (MIW) Eaton Vance Municipal Bond Fund (EIM)
Eaton Vance New York Municipal Bond Fund II (NYH) Eaton Vance New York Municipal Bond Fund (ENX)
Eaton Vance Michigan Municipal Income Trust (EMI)

Eaton Vance Municipal Income Trust (EVN)

Each proposed merger is subject to approval by Acquired Fund shareholders at a Special Meeting of Shareholders scheduled for Friday, August 24, 2018. Proxy materials containing information about the meeting and the proposed merger will be mailed to each Acquired Fund's common shareholders of record as of June 15, 2018. Each Acquired Fund has substantially identical investment objectives and policies as the associated Acquiring Fund, except that Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund and Eaton Vance Michigan Municipal Income Trust invest primarily in municipal bonds the interest on which is generally exempt from both federal income tax and state income tax in the designated state, whereas the Acquiring Funds invest primarily in municipal bonds the interest on which is generally exempt from federal income tax.

April 20, 2018 | NexPoint Strategic Opportunities Fund (NYSE: NHF) (the "Fund"), formerly known as NexPoint Credit Strategies Fund, today announced the commencement of a non-transferable rights offering to purchase additional shares of common stock of the Fund (the "Offering"). The Fund is issuing non-transferable rights ("Rights") to its common shareholders of record as of May 9, 2018 (the "Record Date" and such shareholders, "Record Date Shareholders"). Record Date Shareholders will receive one Right for each common share held on the Record Date. The Rights will entitle the Record Date Shareholders to purchase one new share of common stock for every three Rights held (1 for 3). The Rights will be mailed to Record Date Shareholders approximately two business days after the Record Date. Record Date Shareholders who fully exercise their Rights will be entitled to subscribe for additional common shares of the Fund that remain unsubscribed as a result of any unexercised Rights by Record Date Shareholders. In addition, the Fund in its sole discretion may elect to issue additional common shares in an amount up to 25% of the common shares issued in the primary subscription. The subscription price per common share will be determined based upon a formula equal to the lesser of (1) 95% of the reported net asset value on May 29, 2018 (the "Expiration Date"), or (2) 95% of the average of the last reported sales price of the Fund's common shares on the New York Stock Exchange ("NYSE") on May 29, 2018 (the "Expiration Date") and on each of the four trading days preceding the Expiration Date.

Recent activist or other CEF news

These are from the last month and are quoted from Closed-End Fund Center, Morningstar, or CEFInsight (email alerts); any new news in the past week has a bolded date:

May 24, 2018 | THL Credit Senior Loan Fund (the "Fund") (NYSE: TSLF) today announced several actions relating to the management and oversight of the Fund. The Fund's Board of Trustees (the "Board") has approved THL Credit Advisors LLC ("THL Credit"), the Fund's current subadviser, to serve as the sole investment adviser to the Fund. The Fund's current advisory agreement with Four Wood Capital Advisors LLC ("FWCA") will terminate on June 21, 2018, along with the Fund's investor support services agreement with FWCA's affiliate, Four Wood Capital Partners LLC ("FWCP"). On June 22, 2018, THL Credit will commence serving as the sole investment adviser to the Fund pursuant to an interim advisory agreement that was approved by the Fund's Board (the "Interim THL Agreement"). The Fund's Board also approved a new, non-interim, advisory agreement between the Fund and THL Credit (the "New THL Agreement"), which will be subject to approval by the Fund's shareholders. Under both the Interim THL Agreement and proposed New THL Agreement, the annual fee rate payable by the Fund has been reduced from 1.05% to 0.80% of the value of the Fund's average daily Managed Assets. THL Credit will provide investor support as part of its advisory relationship and the Fund will no longer bear the annual fee of 0.05% of the average daily Managed Assets of the Fund paid to FWCP for those services. In addition, THL Credit has agreed to limit, indefinitely, certain non-management expenses borne by the Fund to an amount not to exceed 0.25% per year of the Fund's Managed Assets (pro-rated for the period in 2018 during which THL Credit serves as the Fund's sole investment adviser). THL Credit also has agreed to bear up to $500,000 of certain expenses in connection with the transfer of the advisory relationship from FWCA to THL Credit.

May 24, 2018 | Eagle Growth and Income Opportunities Fund (the “Fund”) (NYSE: EGIF) today announced that the Fund’s Board of Trustees approved a proposal to reduce the Fund’s annual advisory fee rate, effective May 24, 2018, to 0.85% of the average daily value of the Fund’s Managed Assets,1 a decrease of 0.20% from the prior advisory fee rate of 1.05%. In addition, Fund’s Board of Trustees approved an amended Investor Support Services Agreement which makes permanent a waiver which reduced the fees payable under that agreement, effective May 24, 2018, to 0.05% of the average daily value of the Fund’s Managed Assets, a decrease of 0.05% from the prior fee rate of .10%.

April 30, 2018 | Aberdeen Emerging Markets Equity Income Fund, Inc. (AEF)(the "Fund") announces today that it has successfully completed the reorganizations of Aberdeen Emerging Markets Smaller Company Opportunities Fund, Inc. ("ABE"), Aberdeen Israel Fund, Inc. ("ISL"), Aberdeen Indonesia Fund, Inc. ("IF"), Aberdeen Latin America Equity Fund, Inc. ("LAQ"), Aberdeen Singapore Fund, Inc. ("SGF"), Aberdeen Greater China Fund, Inc. ("GCH") and The Asia Tigers Fund, Inc. ("GRR") into the Aberdeen Chile Fund, Inc. ("CH") after close of regular business on April 27, 2018. Effective today, the consolidated fund has been renamed and will trade on the NYSE American Exchange under the ticker symbol "AEF." In the reorganizations, common shareholders of ABE, ISL, IF, LAQ, SGF, GCH and GRR, respectively, received an amount of CH common shares with a net asset value equal to the aggregate net asset value of their holdings of ABE, ISL, IF, LAQ, SGF, GCH and/or GRR common shares, as applicable, as determined at the close of business on April 27, 2018.

April 27, 2018 | City of London Investment Management Company Limited, which represents clients who are the beneficial owners of approximately 27.6% of the outstanding shares of common stock of The China Fund, Inc. (NYSE: CHN), today commented on China Fund Board's continued waste of stockholder assets and actions to prevent stockholders from exercising their fundamental right to vote (press release).

April 26, 2018 | The Gabelli Dividend & Income Trust (NYSE:GDV) (the “Fund”) announced today that it will redeem one half (1,271,148 shares) of its outstanding 6.00% Series D Cumulative Preferred Shares (the “Series D Preferred Shares”). The shares will be redeemed at $25.30 per Series D Preferred Share (the “Redemption Price”), which consists of $25.00 per Series D Preferred Share (the liquidation preference) plus accumulated and unpaid dividends and distributions through the redemption date of June 8, 2018. From and after the redemption date, the Series D Preferred Shares being redeemed will no longer be deemed outstanding, dividends will cease to accumulate and all the rights of the Series D Preferred shareholders with respect to the redeemed Series D Preferred Shares will cease, except the right to receive the Redemption Price, without interest.

Distribution changes announced this month

These are sorted in ascending order of distribution change percentage. Funds with distribution changes announced this month are included. Any distribution declarations made this week are in bold. I've also added monthly/quarterly information as well as yield, coverage (after the boost/cut), discount and 1-year z-score information. I've separated the funds into two sub-categories, cutters and boosters.

Cutters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex date
MS Income Securities (ICB) -59.8% 0.10583 0.0425 2.75% -0.16% 1.7 116% 5/8/2018 5/17/2018
New Germany Fund (GF) -57.9% 0.7433 0.3129 5.61% -11.33% -1.5 17% 5/9/2018 5/18/2018
Duff & Phelps Select Energy ML (DSE) -31.8% 0.22 0.15 10.64% -1.41% -1.3 0% 5/1/2018 5/10/2018
Salient Midstream & MLP Fund (SMM) -29.9% 0.244 0.171 6.97% -9.75% -1.2 0% 5/7/2018 5/16/2018
Virtus Global Multi-Sector Inc (VGI) -19.2% 0.156 0.126 10.71% -3.02% -1.2 57% 5/23/2018 7/11/2018
EV Limited Duration Income (EVV) -16.9% 0.0806 0.067 6.33% -13.19% -2.1 98% 5/1/2018 5/10/2018
EV Short Duration Diversified (EVG) -15.0% 0.0765 0.065 5.95% -12.53% -2.4 86% 5/1/2018 5/23/2018
European Equity Fund (EEA) -14.0% 0.0351 0.0302 0.68% -11.35% -1.8 -16% 5/9/2018 5/18/2018
Putnam Master Intermediate Inc (PIM) -12.0% 0.025 0.022 5.61% -6.18% -0.6 102% 5/18/2018 6/21/2018
Putnam Managed Muni Income (PMM) -9.1% 0.0318 0.0289 4.92% -9.85% -1.3 106% 5/18/2018 6/21/2018
Deutsche Multi-Market Income (KMM) -7.1% 0.035 0.0325 4.44% -2.66% 2.1 116% 5/9/2018 5/18/2018
Clough Global Opportunities (GLO) -3.2% 0.1031 0.0998 10.97% -9.53% -0.5 -4% 5/11/2018 5/18/2018
Templeton Global Income (GIM) -3.0% 0.0336 0.0326 4.82% -13.09% -1.7 93% 5/1/2018 5/14/2018
Clough Global Equity (GLQ) -2.9% 0.1257 0.122 10.65% -7.78% -0.1 -4% 5/11/2018 5/18/2018
Delaware Enhanced Gbl Div&Inc (DEX) -2.6% 0.1086 0.1058 10.90% -5.21% 1.8 25% 5/1/2018 5/10/2018
MFS California Municipal Fund (CCA) -2.5% 0.04 0.039 4.55% -15.51% -1.8 -121% 5/1/2018 5/15/2018
EV Float-Rate 2022 Target Term (EFL) -2.4% 0.042 0.041 5.17% -2.16% 0 79% 5/1/2018 5/10/2018
Delaware Inv Div & Inc (DDF) -2.2% 0.0986 0.0964 10.41% -3.56% 3.1 27% 5/1/2018 5/10/2018
Clough Global Div and Inc Fund (GLV) -2.1% 0.1166 0.1141 10.94% -8.08% -0.8 1% 5/11/2018 5/18/2018
EV Senior Floating Rate (EFR) -1.4% 0.073 0.072 5.91% -5.10% -0.7 105% 5/1/2018 5/23/2018
MFS Intermediate Income (MIN) -0.6% 0.03008 0.02991 9.35% -8.13% -1.8 26% 5/1/2018 5/15/2018
Franklin Limited Duration Inco (FTF) -0.5% 0.0998 0.0993 10.80% -6.45% -0.4 33% 5/18/2018 5/30/2018
MFS Government Markets Income (MGF) -0.4% 0.02956 0.02943 7.87% -6.85% -2.1 38% 5/1/2018 5/15/2018
MFS Multi-Market Income (MMT) -0.3% 0.04249 0.04236 9.06% -10.38% -1.8 54% 5/1/2018 5/15/2018
MFS Charter Income (MCR) -0.3% 0.05965 0.0595 9.02% -9.79% -1.8 51% 5/1/2018 5/15/2018
MFS Intermediate High Income (CIF) -0.2% 0.02103 0.02098 9.61% 0.77% -0.5 61% 5/1/2018 5/15/2018
Wells Fargo Adv Multi-Sec Inc (ERC) -0.2% 0.10781 0.10761 10.14% -7.42% 0.7 73% 5/23/2018 6/12/2018

Boosters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex date
EV Floating-Rate Inc Plus Fund (EFF) 1.4% 0.074 0.075 5.49% -7.11% 0.4 99% 5/1/2018

5/23/2018

CEF analysis from around Seeking Alpha...

Arbitrage Trader presents Weekly Review: High-Yield CEFs (May 23), Weekly Review: Municipal Bond CEFs (May 23), Weekly Municipal Bond CEF Trades (May 23), and Weekly Review: Master Limited Partnership CEFs (May 23)

George Spritzer, CFA presents Voya Prime Rate Trust: This Fund Should Perform Well If The Fed Continues To Raise Short-Term Rates (May 24)

Nick Ackerman presents CEF NAD: Tax-Free Income Becoming Enticing? (May 24), CEF EOS: Up A Whopping 19.5% YTD (May 26) and CEF ETG: Discount Widens Slightly For This 7.24% Yielder (May 27)

Stanford Chemist presents: The Chemist's 'High-High-Low' CEF Report - April 2018 (May 25)

*To subscribers: these link to the public version of the article, which you will already have seen in the members section.

Macro/market section

Fear & Greed Trader presents S&P 500 Weekly Update: Consolidation Continues; A Market In Search Of Common Sense (May 25)

Lance Roberts presents Stuck In The Middle With You (May 27)

Jeff Miller presents Weighing The Week Ahead: Should Investors Ignore The Shifting Geopolitical Winds? (May 27)

Commentary and actionable takeaway

(This is normally exclusive to members of the Cambridge Income Laboratory, but has been released to the public as part of my 8,000 followers celebration)

Two pleasant news events were fee cuts at THL Credit Senior Loan Fund (TSLF) and Eagle Growth and Income Opportunities Fund (the “Fund”) (EGIF). For TSLF, there has been a reduction of the annual fee rate payable by from 1.05% to 0.80% (of managed assets) to THL Credit Advisors LLC, which is also now serving as the sole advisor of the fund after terminating the co-advisory agreement with Four Wood Capital Advisors LLC and the investor support services agreement with Four Wood Capital Partners LLC.

THL Credit Advisors will also provide investor support as part of its advisory relationship, and TSLF will no longer bear the annual fee of 0.05% paid to FWCP for those services. In addition, THL Credit has agreed to limit, indefinitely, certain non-management expenses borne by the TSLF to 0.25% per year, while also bearing up to $500,000 of certain expenses in connection with the transfer of the advisory relationship from FWCA to THL Credit. TSLF is a senior loan fund that currently trades at a discount of -6.71%, a 1-year z-score of +0.20, and yields 6.64%.

For EGIF, the fund's Board of Trustees approved a proposal to reduce the Fund’s annual advisory fee rate from 1.05% to 0.85% (of managed assets). In addition, the Board of Trustees approved an amended Investor Support Services Agreement, which makes permanent a fee waiver that had reduced the fees payable from 0.10% to 0.05%. EGIF is a global growth & income fund that currently trades at a discount of -17.97%, a 1-year z-score of -1.6 and a yield of 5.79%.

Both of these fee reductions are welcome developments and I applaud their management for taking these shareholder-friendly actions. To my knowledge, neither of these changes were initiated by activist investor involvement.

Managed Duration Investment Grade Municipal Fund (MZF) announced a proposal to liquidate the fund last Friday, but I missed the news last week. The discount contracted on news of the announcement, and the current discount is -2.33%. There doesn't appear to be much alpha opportunity left here. This event was likely to be initiated by activist investor Karplus Investments, who own 27% of the shares and are likely to be big beneficiaries of the liquidation.

Chart

MZF data by YCharts

NexPoint Strategic Opportunities Fund (NHF)'s offering expired on May 29, 2018. Based on the formula, the subscription price will be 95% of the average price of the last 5 trading days including expiration day, i.e. $21.30. This is a discount of -3.45% from the current price (-18.70% discount to the NAV), making it a bit less attractive than the "95% of price" condition would initially suggest. Still, I would expect the offer to be fully subscribed, and the full 25% oversubscription privilege is likely to be exercised as well. This also means that the NAV hit will be softened somewhat as well. Thanks to Member A for pointing this out in our NHF rights offering analysis article!

Virtus Global Multi-Sector Income Fund (VGI) cuts its distribution by -19.2% last week, from 15.6 to 12.6 cents monthly. The new yield is a still-high 10.71%, and the new coverage ratio is 57%. VGI, a "multisector leveraged" fund according to CEFConnect, ran an iron condor option strategy on the S&P 500 that likely generated large losses during the volatile early months of 2018 (see Left Banker article here).

News of the cut caused a painful -6% drop in the share price of VGI, but about half of the drop has already recovered in the past two days. At a current discount of -1.93% and a 1-year z-score of -1.0, the fund is not nearly attractively priced enough for me to take interest, despite the price drop.

Chart

VGI Price data by YCharts

Two Putnam fixed income funds, Putnam Master Intermediate Income Trust (PIM) and Putnam Managed Municipal Income Trust (PMM) cut their distributions by -12.0% and -9.1% respectively. The new coverage ratios are 102% and 106%, meaning that the cuts were needed to bring the distributions down to the level of the earnings. They now yield 5.61% and 4.92% respectively.

Disclosure: I am/we are long THE PORTFOLIO SECURITIES. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.