Weekly Closed-End Fund Roundup: JQC Boosts Yield To 16%

|
Includes: ACV, AEF, APB, APF, BBF, BHV, BME, BZM, CAF, CIF, CLM, CRF, CXE, CXH, DBL, DDF, DEX, DFP, DHY, ECC, EFF, EIV, EMF, EMJ, EOT, FFC, FLC, FOF, GGO, GLO, GLQ, GLU, GLV, GRF, IFN, IVH, JHD, JHI, JHS, JQC, MCR, MFV, MGF, MIN, MMT, MMU, MNP, MPA, MUE, MYF, MZA, NAZ, NCZ, NXC, OCCI, OXLC, PCN, PFD, PFO, PGP, PPR, PTY, PYN, RCG, RGT, RMT, RVT, SPE, SRF, TEI, WEA
by: Stanford Chemist
Summary

0 CEF sectors out of 31 positive on price and 2 out of 31 sectors positive on NAV.

Prices crash, discounts widen and yields shoot up.

JQC to distribute 20% of NAV over the next three years.

GLU completes rights offering.

(Note: As we didn't have the CEF Roundup last week due to my data guy being suddenly unavailable, this piece will cover the last two weeks of events. Hence, all statistics are being compared to data from two weeks ago.)

The Weekly Closed-End Fund 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, December 21, 2018.

Weekly performance roundup

0 out of 31 sectors were positive on price (down from 10 two weeks ago) and the average price return was -8.04% (down from -2.78%). Muni sectors lost the least, while equity sectors fared the worst, led by health/biotech (-16.33%), MLPs (-15.79%), tax-advantaged equity (-14.88%), covered call (-12.94%) and general equity (-12.48%).

(Source: Stanford Chemist, CEFConnect)

2 out of 31 sectors were positive on NAV (down from 11 two weeks ago), while the average NAV return was -4.31% (down from -1.17%). The only two positive sectors were Pennsylvania munis and New Jersey munis. MLPs fared the worst at -13.26%, followed by health/biotech (-9.78%) and real estate (-8.91%).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium is multisector income (-6.48%), while the sector with the highest discount is New Jersey munis (-16.90%). The average sector discount is -12.22% (down from -8.57% two weeks ago).

(Source: Stanford Chemist, CEFConnect)

Emerging market equity showed the largest premium/discount increase (-0.85%), while tax-advantaged equity showed the largest premium/discount decline (-6.99%). The average change in premium/discount was -3.68% (down from -0.19% two weeks ago).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is health/biotech (+0.42) while the sector with the lowest z-score is a senior loan (-1.89). The average z-score is -2.15 (down from -0.71 two weeks ago).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest yield is MLPs (14.31%), global growth & income (12.23%), global equity dividend (11.34), emerging market income (10..85%) and covered call (10.34%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is 8.28% (up from 7.85% last week).

(Source: Stanford Chemist, CEFConnect)

Individual CEFs that have undergone a significant decrease in premium/discount value over the past two weeks, 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
(PGP) -23.61% 14.64% 13.93% -2.1 -22.21% -6.10%
(CLM) -22.44% 25.22% -13.00% -4.1 -20.50% 0.00%
(CRF) -21.03% 24.74% -11.16% -4.0 -19.14% 0.00%
(ECC) -17.68% 17.78% -17.68% -5.0 -17.68% 0.00%
(SPE) -14.31% 12.61% -28.08% -5.0 -16.12% 0.57%
(ACV) -13.62% 11.31% -8.09% -2.3 -20.64% -8.88%
(BME) -13.23% 7.43% -5.75% -2.1 -19.67% -8.39%
(OXLC) -13.18% 19.23% -15.58% -3.8 -13.50% 0.00%
(NCZ) -12.69% 15.90% -6.67% -5.3 -17.80% -6.63%
(OCCI) -12.30% 13.78% -27.30% 0.0 -14.47% 0.00%

(Source: Stanford Chemist, CEFConnect)

Conversely, individual CEFs that have undergone a significant increase in premium/discount value in the past two weeks, 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
(RCG) 12.50% % -12.50% -0.7 -2.00% -16.00%
(GGO) 10.21% 5.33% 1.28% 0.9 -1.96% -11.85%
(MNP) 4.70% 4.70% -6.92% 2.9 5.39% 0.06%
(MMU) 4.32% 5.39% -2.05% 0.9 4.62% 0.00(%
(SRF) 3.32% 7.64% -14.32% 0.5 -14.32% -17.64%(
(WEA) 2.54% 6.36% -5.40% 2.1 0.74% -1.97%
(GRF) 2.41% 7.20% -14.54% -1.3 1.49% -1.37%
(FOF) 2.18% 9.99% -6.86% -0.5 -7.28% -9.44%
(PYN) 1.59% 5.66% 3.58% 0.2 1.44% -0.12%
(RGT) 1.54% 0.47% -15.43% -0.5 -6.74% -8.44%

(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:

December 19, 2018 | Gabelli Global Utility & Income Trust Completes Successful Rights Offering. The Board of Trustees of The Gabelli Global Utility & Income Trust (GLU) (the “Fund”) is pleased to announce the completion of its transferable rights offering (the “Offering” or “Offer”) in which the Fund will issue approximately 1.2 million common and 1.2 million newly issued Series B Cumulative Puttable and Callable preferred shares (the “Series B Preferred”), totaling $85 million. Pursuant to the Offer, the Fund issued one transferable right (a “Right”) for each common share of the Fund to shareholders of record (record date shareholders) as of November 12, 2018. Holders of Rights were entitled to purchase one common share and one newly issued Series B preferred share by submitting three Rights and $67.50 per share (the subscription price). The Offer expired at 5:00 PM Eastern Time on December 14, 2018 and the Rights no longer trade on the NYSE American. All of the common and preferred shares subscribed for will be issued on or about December 19, 2018.

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:

December 6, 2018 | Morgan Stanley Asia-Pacific Fund, Inc. Announces Reorganization into Morgan Stanley Institutional Fund, Inc. – Emerging Markets Portfolio. Morgan Stanley Asia-Pacific Fund, Inc. (NYSE: APF) (the “Fund”) announced that, after considering the recommendation of the Fund’s investment adviser, Morgan Stanley Investment Management Inc., the Board of Directors of the Fund determined that it would be in the best interest of stockholders of the Fund to approve an Agreement and Plan of Reorganization by and between the Fund and Morgan Stanley Institutional Fund, Inc., on behalf of its series Emerging Markets Portfolio (“MSIF Emerging Markets”), pursuant to which substantially all of the assets and liabilities of the Fund would be transferred to MSIF Emerging Markets and stockholders of the Fund would become stockholders of MSIF Emerging Markets, receiving shares of common stock of MSIF Emerging Markets equal to the value of their holdings in the Fund (the “Reorganization”). The Reorganization of the Fund will be submitted for stockholder approval at a special meeting of stockholders (the “Meeting”) scheduled to be held on March 8, 2019, and any adjournments or postponements thereof, to stockholders of record on January 14, 2019. Further information about the Reorganization will be included in a proxy statement/prospectus expected to be mailed to stockholders in the first quarter of 2019.

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:

December 17, 2018 | Nuveen Credit Strategies Income Fund Announces Capital Return Plan. The Nuveen Credit Strategies Income Fund (JQC) announced that the fund’s Board of Trustees at its December meeting approved adoption of a capital return plan. The plan is the latest in a series of actions undertaken with the goal of enhancing fund competitiveness and investment returns for current and prospective common shareholders. Under the plan, JQC will return to shareholders 20 percent of common assets, or approximately $240 million of its capital as of December 14, 2018, over the next three years through supplemental amounts included in the fund’s regular monthly distributions. Additional information on the fund’s capital return plan is available here. Pursuant to the plan, JQC is declaring its next monthly distribution. The following dates and amounts apply to today's monthly distribution declaration for JQC:

Record Date January 15, 2019
Ex-Dividend Date January 14, 2019
Payable Date February 1, 2019

Ticker

Exchange

Fund Name

Ordinary

Income

Amount

Supplemental

Amount

Total

JQC NYSE Nuveen Credit Strategies Income Fund $0.0385 $0.0630 $0.1015

As of December 14, 2018, the total distribution of $0.1015 would result in distribution rates of 14.1% and 16.4% on net asset value and market value, respectively. Closed-end fund historical distribution sources have included net investment income, realized gains and return of capital.

December 14, 2018 | PIMCO Corporate & Income Opportunity Fund and PIMCO Corporate & Income Strategy Fund Announce Change to Non-Fundamental Investment Policy. PIMCO Corporate & Income Opportunity Fund (PTY) and PIMCO Corporate & Income Strategy Fund (PCN) announced that, effective on or about February 12, 2019, each Fund will amend its non-fundamental investment policy to, under normal market conditions, invest at least 80% of its total assets in a combination of corporate debt obligations of varying maturities, other corporate income-producing securities, and income-producing securities of non-corporate issuers, such as U.S. Government securities, municipal securities and mortgage-backed and other asset-backed securities issued on a public or private basis (the "Current Policy") to read as follows: Under normal market conditions, the Fund seeks to achieve its investment objective by investing at least 80% of its net assets plus borrowings for investment purposes in a combination of corporate debt obligations of varying maturities, other corporate income-producing securities, and income-producing securities of non-corporate issuers, such as U.S. Government securities, municipal securities and mortgage-backed and other asset-backed securities issued on a public or private basis (the "Amended Policy").

December 14, 2018 | Aberdeen Emerging Markets Equity Income Fund, Inc. Announces Quarterly Distribution Policy And Restates Previously Announced Targeted Discount Policy. Aberdeen Emerging Markets Equity Income Fund, Inc. (AEF) announced today, that recognizing the higher yielding characteristics of the portfolio of the Fund, the Board has approved a policy to pay distributions quarterly, comprised of net investment income generated by dividends paid from the Fund's underlying securities. Based on estimated dividend income over the period, net of taxes and expenses, the Fund will pay a quarterly distribution at an annualized rate of 2.0% for the next 12-months ending December 31, 2019. This policy will be subject to ongoing review by the Board. In connection with the above policy, the first quarterly distribution in the amount of US 4 cents per share will be paid on January 10, 2019 to shareholders of record at the close of business on December 31, 2018.

November 26, 2018 | Eaton Vance Tax-Advantaged Bond and Option Strategies Fund Announces Changes to Fund Name, Investment Objective, Fees and Distributions. The Board of Trustees of Eaton Vance Tax-Advantaged Bond and Option Strategies Fund (NYSE: EXD) (the "Fund") has approved changes to the Fund's name, investment objective and investment policies as described below. In connection with these changes, the portfolio managers of the Fund will change and the Fund's investment advisory fee rate will be reduced as discussed below. Each of the foregoing changes will be effective on or about February 8, 2019. Following implementation of the changes to the Fund's investment objective and policies, the Fund will increase the frequency of its shareholder distributions from quarterly to monthly and raise the distribution rate as described below.

Name. The Fund's name will change to "Eaton Vance Buy-Write Strategies Fund." It will continue to be listed on the New York Stock Exchange under the ticker symbol "EXD."

Investment Objectives. As revised, the Fund will have a primary objective to provide current income and gains, with a secondary objective of capital appreciation. In pursuing its investment objectives, the Fund will evaluate returns on an after-tax basis, seeking to minimize and defer shareholder federal income taxes. The Fund's current investment objective is tax-advantaged income and gains.

Investment Policies. Pursuant to its revised investment policies, the Fund's strategy will consist of owning a diversified portfolio of common stocks and selling covered index call options (a "buy-write strategy"). Under normal market conditions, the Fund's investment program will consist primarily of (1) owning a diversified portfolio of common stocks, a segment of which ("Segment One") seeks to exceed the total return performance of the S&P 500 Composite Stock Price Index® (the "S&P 500") and a segment of which ("Segment Two") seeks to exceed the total return performance of the NASDAQ 100 Index® (the "NASDAQ 100") and (2) selling on a continuous basis S&P 500 call options on at least 80% of the value of Segment One and NASDAQ 100 call options on at least 80% of the value of Segment Two. Initially, approximately 50% to 75% of the Fund's net assets will be invested in Segment One and the balance will be invested in Segment Two. Although the Fund will designate separate S&P 500 and NASDAQ 100 segments, the Fund's stock portfolio will be managed on an integrated basis. Over time, the percentages of the Fund's stock portfolio invested in each Segment may vary based on the investment adviser's evaluation of equity market conditions and other factors. Due to tax considerations, the Fund intends to limit the overlap between its stock portfolio holdings (and any subset thereof) and each of the S&P 500 and the NASDAQ 100 to less than 70% on an ongoing basis. The Fund's stock holdings may include stocks not included in either index.

The Fund will seek to generate current earnings in part by employing an options strategy of writing (selling) index call options on the S&P 500 and the NASDAQ 100. Under normal market conditions, the Fund expects to sell on a continuous basis S&P 500 call options on at least 80% of the value of Segment One and NASDAQ 100 call options on at least 80% of the value of Segment Two. Under normal market conditions, at least 80% of the value of the Fund's total assets will be subject to written index call options. Writing index call options involves a tradeoff between the option premiums received and reduced participation in potential future stock price appreciation of the Fund's portfolio of common stocks.

The Fund currently employs a tax-advantaged short-term bond strategy ("Bond Strategy") and a rules-based option overlay strategy that consists of writing put and call spreads on the S&P 500 ("Option Overlay Strategy"). The Bond Strategy consists of investing in a diversified portfolio of short-term, high quality municipal securities and other debt obligations. The Options Overlay Strategy involves the selling of S&P 500 put spreads and call spreads following a systematic, rules-based strategy. The Options Overlay Strategy is designed to monetize the difference between the implied volatility of the S&P 500 as reflected in options prices and the realized volatility of the index.

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.

(Note: Due to the large amount of special distributions this month some of these funds may accidentally appear as cutters and boosters due to how my screening algorithm calculates distribution changes. Apologies in advance for any mistakes).

Cutters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
Doubleline Opportunistic Cred (DBL) -34.1% 0.167 0.11 6.98% -3.91% -2.6 105% 12/4/2018 12/12/2018
Templeton Emerging Markets (EMF) -30.1% 1.1178 0.7808 6.18% -13.37% -0.9 2% 12/3/2018 12/14/2018
BlackRock MD Muni Bond (BZM) -29.7% 0.06742 0.0474 4.39% -11.32% -0.9 91% 12/3/2018 12/12/2018
EV National Muni Opps Trust (EOT) -20.0% 0.1074 0.0859 5.50% -9.69% -2.3 93% 12/4/2018 12/13/2018
Ivy High Income Opportunities (IVH) -16.7% 0.12 0.1 10.23% -17.57% -3.9 108% 12/3/2018 12/13/2018
Asia Pacific Fund (APB) -16.1% 0.62 0.52 4.57% -1.47% 1.7 9% 12/4/2018 12/13/2018
BlackRock VA Municipal Bond (BHV) -15.1% 0.063 0.0535 4.23% 3.12% -1.3 101% 12/3/2018 12/12/2018
India Fund Inc (IFN) -12.7% 0.71 0.62 11.50% -15.94% -3.1 -1% 12/11/2018 12/28/2018
BlackRock MuniYield Inv Fund (MYF) -10.8% 0.0695 0.062 5.79% -7.75% -2.6 103% 12/3/2018 12/12/2018
EV NJ Municipal Bond (EMJ) -10.2% 0.0491 0.0441 4.55% -16.10% -1.6 102% 12/3/2018 12/21/2018
BlackRock MuniYield Arizona (MZA) -9.6% 0.052 0.047 4.61% -11.76% -1.7 101% 12/3/2018 12/12/2018
EV Municipal Bond II (EIV) -9.4% 0.0447 0.0405 4.43% -14.16% -3.5 102% 12/3/2018 12/21/2018
BlackRock MuniHoldings Qty II (MUE) -9.3% 0.054 0.049 5.10% -13.32% -1.3 102% 12/3/2018 12/12/2018
Nuveen High Income Dec 2019 Ta (JHD) -7.1% 0.035 0.0325 3.94% -0.30% 2.8 105% 12/3/2018 12/13/2018
Nuveen CA Select Tax-Free (NXC) -6.8% 0.044 0.041 3.74% -11.40% -1.9 108% 12/3/2018 12/13/2018
Nuveen AZ Quality Muni Income (NAZ) -5.7% 0.044 0.0415 4.27% -16.90% -1.6 105% 12/3/2018 12/13/2018
Flah&Crum Pref Income Opps (PFO) -5.3% 0.066 0.0625 7.79% -5.77% -1 97% 12/11/2018 12/20/2018
Credit Suisse High Yield Bond (DHY) -5.0% 0.02 0.019 11.18% -15.70% -4.2 99% 12/3/2018 12/17/2018
BlackRock MuniYield PA Quality (MPA) -4.5% 0.0555 0.053 5.13% -17.83% -2.3 102% 12/3/2018 12/12/2018
Clough Global Equity (GLQ) -4.3% 0.1165 0.1115 13.37% -13.33% -2.2 1% 12/11/2018 12/20/2018
BlackRock Municipal Income Inv (BBF) -4.1% 0.0605 0.058 5.79% -11.09% -2 104% 12/3/2018 12/12/2018
Flah&Crum Preferred Income (PFD) -3.8% 0.078 0.075 8.37% -12.60% -3.4 97% 12/11/2018 12/20/2018
Clough Global Opportunities (GLO) -3.8% 0.0913 0.0878 13.40% -15.39% -3.9 -3% 12/11/2018 12/20/2018
Flah & Crum Dynamic Pref & Inc (DFP) -3.4% 0.148 0.143 8.81% -12.57% -2.5 96% 12/11/2018 12/20/2018
Flah&Crum Tot Return (FLC) -3.4% 0.119 0.115 8.34% -10.54% -1.5 96% 12/11/2018 12/20/2018
Delaware Enhanced Gbl Div&Inc (DEX) -2.9% 0.0973 0.0945 13.88% -17.81% -4 41% 12/4/2018 12/13/2018
MFS Intermediate High Income (CIF) -2.5% 0.02015 0.01965 11.56% -13.92% -3.1 62% 12/3/2018 12/18/2018
MFS High Income Municipal (CXE) -2.2% 0.023 0.0225 5.86% -11.35% -2.1 113% 12/3/2018 12/18/2018
Delaware Inv Div & Inc (DDF) -2.0% 0.097 0.0951 11.32% 3.28% 0.4 27% 12/4/2018 12/13/2018
Templeton Emerging Mkts Income (TEI) -1.8% 0.0663 0.0651 8.54% -16.21% -2.9 109% 12/3/2018 12/14/2018
Flah&Crum Pref Secs (FFC) -1.8% 0.114 0.112 8.40% -8.41% -1.6 97% 12/11/2018 12/20/2018
MFS Multi-Market Income (MMT) -1.7% 0.04082 0.04014 9.50% -14.21% -2.6 52% 12/3/2018 12/18/2018
MFS Charter Income (MCR) -1.5% 0.05734 0.0565 9.52% -14.83% -2.8 51% 12/3/2018 12/18/2018
Clough Global Div and Inc Fund (GLV) -1.4% 0.1063 0.1048 12.99% -16.05% -4.5 16% 12/11/2018 12/20/2018
MFS Special Value Trust (MFV) -1.3% 0.04583 0.04524 11.67% -8.10% -2.5 30% 12/3/2018 12/18/2018
MFS Investment Grade Muni (CXH) -1.3% 0.039 0.0385 5.30% -14.77% -1.9 101% 12/3/2018 12/18/2018
MFS Intermediate Income (MIN) -0.8% 0.02869 0.02847 9.31% -8.48% -1 31% 12/3/2018 12/18/2018
MFS Government Markets Income (MGF) -0.6% 0.0282 0.02802 7.71% -6.84% -1.2 37% 12/3/2018 12/18/2018

Boosters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
EV Floating-Rate Inc Plus Fund (EFF) 1.3% 0.079 0.08 6.50% -15.71% -2.3 94% 12/3/2018 12/21/2018
MS Asia Pacific (APF) 1.8% 0.15227 0.15506 1.11% -3.63% 4.3 10% 12/11/2018 12/20/2018
MS China A Share (CAF) 3.3% 0.85101 0.87918 9.68% -14.42% 0 0% 12/11/2018 12/20/2018
Voya Prime Rate Trust (PPR) 4.2% 0.0259 0.027 7.25% -15.98% -2.3 86% 12/19/2018 12/28/2018
Royce Micro Cap Trust (RMT) 16.7% 0.18 0.21 12.02% -14.55% -2.9 1% 12/3/2018 12/12/2018
JH Investors Trust (JHI) 17.8% 0.2689 0.3167 9.31% -14.94% -4.6 32% 12/3/2018 12/12/2018
JH Income Securities (JHS) 21.9% 0.1711 0.2085 6.65% -10.81% -1.9 28% 12/3/2018 12/12/2018
Royce Value Trust (RVT) 23.3% 0.3 0.37 13.32% -15.90% -3.9 4% 12/3/2018 12/12/2018

CEF analysis from around Seeking Alpha...

ADS Analytics presents Weekly Fund Wrap: Coal For Christmas(Dec. 17), Weekly Fund Wrap: When Doves Cry (Dec. 24)

Alpha Gen Capital presents December CEF Distributions Widespread Across Sponsors - DBL Cuts Big (Dec. 7)

Arbitrage Trader presents Weekly Review: Real Estate CEFs - A Volatile Week For The Sector (Dec. 12), Weekly Review: Senior Loan CEFs - The Sell-Off In The Sector Continues (Dec. 12), Weekly Review: High-Yield CEFs - 9% Yield Accompanied By One Of The Lowest Z-Scores (Dec. 12), Weekly Review: Municipal Bond CEFs - Another Solid Performance From The Funds In The Sector (Dec. 13), Weekly Review: Preferred Stock CEFs - At A 4.58% Premium But With A 4.12% Fallen NAV (Dec. 13), Weekly Review: CEFs That Follow The Broad Market (Dec. 13), Weekly Review: Master Limited Partnership CEFs - The Average Discount In The Sector Is 9.27% (Dec. 13), Weekly Municipal Bond CEF Trades: This 5.41% Yielder Seems Like A Reasonable Buying Opportunity (Dec. 14), Weekly Review: CEFs That Follow The Broad Market (Dec. 18), Weekly Review: Real Estate CEFs - Principal Real Estate Income Fund Trading Near The Previous Bottom (Dec. 20), Weekly Review: Senior Loan CEFs - Blackstone/GSO Senior Floating Rate Term Fund With -4.40 Z-Score (Dec. 20), Weekly Review: Master Limited Partnership CEFs - New Lows In The Sector (Dec. 20), Weekly Review: Municipal Bond CEFs - A Slight Decrease In The Price Of The Main Benchmark (Dec. 20), Weekly Review: Preferred Stock CEFs - Dividend Cuts In The Sector (Dec. 20), Weekly Review: High-Yield CEFs - KIO Has 10.47% Yield And -2.90 Points Z-Score (Dec. 21), Weekly Municipal Bond CEF Trades: MUI Is Trading At 15% Discount And Its Earnings/Coverage Ratio Is Positive (Dec. 21)

Bram de Haas presents Nuveen Floating Rate Income Fund At A 13% Discount To Net Asset Value (Dec. 14)

CLO Research presents Eagle Point Credit Company Stands To Benefit From Recent Senior Loan ETF Outflows (Dec. 17)

Dividend Seeker presents PFL: Rare Discount Opportunity (Dec. 19)

Douglas Albo presents Equity CEFs: Peak Despair? (Dec. 18), Equity CEFs: Are We Normalized Yet? (Dec. 21)

Nick Ackerman presents Closed-End Funds: Top 10 Performers For 2018 (Dec. 14), Closed-End Funds: Bottom 10 Performances For 2018 (Dec. 17)

Power Hedge presents ETJ: Why I Am Going To Start Building A Position In This CEF (Dec. 16), FEN: A Top-Performing Energy Income CEF (Dec. 19), THW: Sitting Tight With A 12% Yield From This Well-Diversified CEF (Dec. 21)

*Stanford Chemist presents 1.7% Annual Alpha From AllianzGI Convertible & Income 2024 Target Term Fund (Dec. 14), The Chemist's Quality Closed-End Fund Report - November 2018 (Dec. 15), Thoughts On Eagle Point Credit Company's 2018 Q3 Earnings And Conference Call (Dec. 17), Weekly Closed-End Fund Roundup: CEF Rebound Week (Dec. 17), Weekly Closed-End Fund Roundup: DBL Distribution Cut (Dec. 23), Panic Selling Creates Opportunity In Ellsworth Fund (Dec. 24), The Chemist's 'High-High-Low' Closed-End Fund Report - November 2018 (Dec. 24)

Steven Bavaria presents Dec. 24Income Factory: Philosophy, Strategy, And Opportunity (Dec. 24)

The Belgian Dentist presents GAMCO Global Gold, Natural Resources & Income Trust: Volatility At A Discount (Dec. 6)

*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: A Herd Mentality Now With A Market Driven By Fear And Emotion (Dec. 15), S&P 500 Weekly Update: The Oracles Have Spoken, Can Anything Save The Bulls? (Dec. 22)

Jeff Miller presents Weighing The Week Ahead: What Could Go Right? (Dec. 16), Weighing The Week Ahead: What Is Your Course For Uncharted Waters? (Dec. 23)

Lance Roberts presents Is The Market On The Naughty List? (Dec. 16), Santa 'Grinch' Brings Lump Of Coal (Dec. 23)

Commentary and actionable takeaway

In case you were living under a rock, U.S. stocks markets crashed over the last two weeks and are on the cusp of, or are already in, official bear market territory depending on which index you're looking at. CEFs were not spared, and in fact were harder hit than the indices due to widening discounts which compounds losses on top of the already significant NAV declines. However, in my opinion, widening discounts should be viewed as a buying opportunity rather than a reason to panic.

After all, all that has happened is that investors have decided that they value a basket of assets less than before. Steven Bavaria's latest piece "Income Factory: Philosophy, Strategy, And Opportunity" is a must-read for income investors as it lucidly explains the concept of why staying invested and compounding at lower prices is actually a boon for the "Income Factory" strategy.

Therefore, I view this current correction/bear market as a Christmas gift to allow us to buy quality CEFs at discounted prices. In case you missed it, we prepared a Christmas shopping list for CEFs, and a restricted list for muni CEFs, after markets plummeted last Thursday. CEFs took another leg down on Friday, but there were pockets of green on Monday as investors perhaps realized that the bargains in CEFland were too good to pass up.

Nuveen Credit Strategies Income Fund (JQC) has also come up with a very interesting plan to distribute 20% of the fund's NAV over the next three years (see here for further information). The fund intends to add a monthly $0.0630 "supplemental amount" to its ordinary monthly income distribution of $0.0385, effectively giving a +163% (!) boost to its yield. JQC will thus yield over 16% at current market prices, which together with its current -12% discount will grant about 2% alpha per year simply from the distribution. However, note that this will cause the fund's NAV per share to erode as the distribution is very obviously destructive and we should expect commensurate declines in the payout level over the next three years.

Gabelli Global Utility & Income Trust (GLU) completed its rights offering, and will issue about 1.2 million each of new common shares and new preferred shares. The NAV dropped by about -3% on the day that the shares were issued (December 19), as expected for a dilutive offering. Based on the numbers, I estimate that the offering was about 75% subscribed. Compared to last year and early this year where nearly all rights offerings were fully subscribed, it is clear that the souring market sentiment has caused rights holders to be more tentative in their decision to exercise. Along these lines, I would expect the pace of rights offerings to slow dramatically next year as well.

Disclosure: I am/we are long CLM, ECC, PCN. 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.