The Month In Closed-End Funds: January 2019

by: Tom Roseen

For the second month in three, equity CEFs and fixed income CEFs on average witnessed a gain, rising 8.27% and 2.17%, respectively, on a net-asset-value (NAV) basis for January.

Only 14% of all CEFs traded at a premium to their NAV, with 19% of equity CEFs and 10% of fixed income CEFs trading in premium territory.

Energy MLP CEFs (+18.25%) posted the strongest returns of all equity CEF classifications for the month.

The Emerging Markets Debt CEF classification(+6.10%) posted the strongest plus-side returns in the fixed income universe for the month.

For the third month in a row, the municipal debt CEFs macro-group posted a plus-side return on average (+0.73%), with all classifications in the group witnessing positive returns for January.

Photo Source: REUTERS/Leah Millis. U.S. Trade Representative Robert Lighthizer (2nd R) speaks across from China's Vice Premier Liu He (NYSE:L) during the opening of US-China Trade Talks in the Eisenhower Executive Office Building at the White House in Washington, January 30, 2019.

For the month, 98% of all CEFs posted NAV-based returns in the black, with 97% of equity CEFs and 99% of fixed income CEFs chalking up returns in the plus column. For the first month in six, the Energy MLP CEFs classification (+18.25%, December’s cellar dweller) handily outperformed all the other equity classifications, followed by Natural Resources CEFs (+12.47%) and Growth CEFs (+10.58%). For the first month in four, world income CEFs jumped to the top of the leaderboard, posting a plus-side return on average (+4.25%), followed by domestic taxable fixed income CEFs (+3.23%) and municipal bond CEFs (+0.73%). The world income CEFs macro-group was propelled to the head of the class by strong performance from Emerging Markets Debt CEFs (+6.10%) and Global Income CEFs (+3.38%). For January, the median discount of all CEFs narrowed 369 bps to 8.28%. In this report, we highlight January 2019 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.