Weekly Closed-End Fund Roundup: Rebound Continues

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Includes: AEF, APF, BTO, CCA, CIF, CXH, DDF, DEX, ECF, EDF, EFL, EMO, GGO, GIM, GLU, GRF, IDE, IFN, JEQ, JHAA, JHY, JQC, KYN, LGI, LOR, MCR, MFM, MGF, MMT, MMU, PCN, PDT, PGP, PTY, PYN, TEI, THQ, UTG
by: Stanford Chemist
Summary

30 CEF sectors out of 31 positive on price and 27 out of 31 sectors positive on NAV.

Average sector premiums rose +1.59%, and are right back where they were three weeks ago.

MLPs led the way with +11.46% return, followed by energy/resources at +6.06%, high yield at 3.77% and preferreds at +3.63%.

This article was first released to subscribers 2 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. Data are taken from the close of Friday, January 4, 2019.

Weekly performance roundup

30 out of 31 sectors were positive on price (up from 27 last week) and the average price return was +2.84% (up from +2.53% last week). MLPs led the way with +11.46% return, followed by energy/resources at +6.06%, high yield at 3.77% and preferreds at +3.63%. The only negative sector was other non-U.S. equity at -0.23%.

(Source: Stanford Chemist, CEFConnect)

27 out of 31 sectors were positive on NAV (up from 19 last week), while the average NAV return was +1.10% (up from +0.27% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium is multisector income (-1.09%), while the sector with the highest discount is New Jersey munis (-15.11%). The average sector discount is -8.68% (up from -10.23% last week).

(Source: Stanford Chemist, CEFConnect)

MLPs showed the largest premium/discount increase (+4.01%), while emerging market equity showed the largest premium/discount decline (-0.23%). The average change in premium/discount was +1.55% (down from +1.99% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is Asia equity (+0.76) while the sector with the lowest z-score is global growth & income (-1.80). The average z-score is -0.77 (up from -1.21 last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest yield is MLPs (11.89%), global growth & income (11.27%), global equity dividend (10.61%), emerging market income (10.20%) and covered call (9.65%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is 7.75% (down from 8.02% 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

(JHAA)

-7.70%

%

2.33%

0.0

-7.00%

0.00%

(GGO)

-4.43%

5.67%

-12.09%

-1.0

0.00%

5.04%

(MMU)

-3.17%

5.33%

-1.43%

1.2

-2.61%

0.53%

(THQ)

-3.14%

8.20%

-10.64%

-0.5

-1.85%

1.60%

(JHY)

-2.66%

4.73%

3.56%

2.3

-1.79%

0.74%

(UTG)

-2.55%

6.94%

-2.10%

1.9

0.48%

3.09%

(EDF)

-2.18%

18.86%

10.41%

-0.3

0.00%

1.97%

(ECF)

-2.06%

6.15%

-12.47%

-0.9

-0.76%

1.58%

(PDT)

-1.92%

8.30%

3.30%

-1.6

1.29%

3.18%

(EFL)

-1.90%

5.99%

-4.55%

0.0

0.23%

2.21%

(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

(PGP)

10.60%

11.57%

40.24%

0.9

10.38%

2.04%

(IDE)

8.41%

10.21%

-10.41%

-1.7

4.12%

-5.65%

(GRF)

8.37%

7.27%

-10.22%

-1.4

10.96%

0.62%

(IFN)

7.90%

12.14%

-14.09%

-1.4

1.24%

-8.08%

(DDF)

7.72%

9.50%

16.78%

2.0

6.54%

-0.50%

(JEQ)

7.68%

7.28%

-13.84%

-1.1

2.80%

-6.36%

(EMO)

7.66%

14.63%

-5.30%

-0.8

15.28%

5.96%

(PYN)

7.47%

5.40%

7.93%

1.3

7.93%

0.46%

(BTO)

7.39%

7.38%

1.29%

-0.9

10.00%

1.98%

(KYN)

7.20%

12.38%

2.18%

0.3

13.52%

5.52%

(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
Lazard Glb Total Return & Inc (LGI) -23.2% 0.11556 0.08879 8.06% -11.22% -2.6 30% 1/2/2019 1/10/2019
Lazard World Dividend & Income (LOR) -21.7% 0.07409 0.05799 9.24% -12.09% -1.8 94% 1/2/2019 1/10/2019
Delaware Enhanced Gbl Div&Inc (DEX) -4.0% 0.0945 0.0907 12.44% -15.21% -2.5 43% 1/2/2019 1/14/2019
Delaware Inv Div & Inc (DDF) -4.0% 0.0951 0.0913 9.50% 16.78% 2 28% 1/2/2019 1/14/2019
MFS California Municipal Fund (CCA) -2.9% 0.035 0.034 4.03% -16.07% -0.8 128% 1/2/2019 1/15/2019
MFS Intermediate High Income (CIF) -2.3% 0.01965 0.01919 10.37% -7.88% -1.6 64% 1/2/2019 1/15/2019
Templeton Global Income (GIM) -1.9% 0.0378 0.0371 6.03% -13.78% -1 81% 1/2/2019 1/14/2019
MFS Municipal Income (MFM) -1.7% 0.0295 0.029 5.43% -9.97% -0.4 107% 1/2/2019 1/15/2019
MFS Investment Grade Muni (CXH) -1.3% 0.0385 0.038 5.04% -11.83% -0.4 103% 1/2/2019 1/15/2019
MFS Multi-Market Income (MMT) -0.9% 0.04014 0.03976 9.02% -11.24% -0.6 53% 1/2/2019 1/15/2019
MFS Charter Income (MCR) -0.5% 0.0565 0.0562 8.99% -11.14% -0.5 51% 1/2/2019 1/15/2019

Boosters

Name Ticker Change Previous Current Yield Discount z-score Coverage Announced Ex-date
Templeton Emerging Mkts Income (TEI) 0.6% 0.0651 0.0655 8.09% -11.97% -0.8 108% 1/2/2019 1/14/2019
MFS Government Markets Income (MGF) 1.0% 0.02802 0.0283 7.55% -4.66% 2.6 37% 1/2/2019 1/15/2019

CEF analysis from around Seeking Alpha...

Recommended reads are in bold.

Alpha Gen Capital presents Yield Hunting Power Rankings Report - December (Jan. 2)

Arbitrage Trader presents Weekly Review: Real Estate CEFs - The Sector Tries To Form A Bottom (Jan. 5), Weekly Review: CEFs That Follow The Broad Market (Jan. 3), Weekly Review: High-Yield CEFs - ISD Has One Of The Biggest Discounts (Jan. 3).

Dividend Seeker presents JGH: Risks Abound In The High Yield Credit Market (Jan. 3), PHK: Had A Good 2018, Can 2019 Repeat? (Jan. 1), PDI: A Great Option For The New Year (Dec. 31)

Laurentian Research presents Tortoise Pipeline & Energy Fund: An Under-The-Hood Look At This 13.3%-Yielding, 11.3%-Discounted CEF (Dec. 31)

Nick Ackerman presents HTD: A Long-Term Winning CEF (Jan. 2)

Douglas Albo presents Equity CEFs: Top Picks For 2019 (Jan. 2)

Stanford Chemist presents What's Up (Down) With ACP? (Jan. 2), ECC: Danger Or Opportunity? - Part 2 (Dec. 31), Christmas CEF Shopping List (Dec. 31)

Tom Roseen presents The Month In Closed-End Funds: December 2018 (Jan. 4).

Macro/market section

Fear & Greed Trader presents S&P 500 Weekly Update: 2019 Looks To Be A Very Difficult Year To Navigate (Jan. 5)

Jeff Miller presents Weighing The Week Ahead: Should We Worry About Peaking Economic Data? (Jan. 7)

Lance Roberts presents The 'New Year' Starts With A Rally (Jan. 6)

Commentary and actionable takeaway

Lazard Global Total Return & Income Fund and Lazard World Dividend & Income Fund cut their distributions by -23.2% and -21.7% this week, which should not have been a surprise since the funds have a managed distribution policy of paying out 7% on NAV.

With both funds' NAVs falling over 20% in 2018, such a distribution reduction was inevitable.

No other CEF news to comment on this week - please see our most recent Chemist's Closed-End Fund Report for our analysis of the last week's CEF action.

Disclosure: I am/we are long 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.