The Month In Closed-End Funds: October 2019

Nov. 05, 2019 3:32 PM ETTWN, HQL, HQH, CEE, JOF, BFITX, VKQ, EDD, BWG, EDI1 Comment
Tom Roseen profile picture
Tom Roseen


  • For the second month in a row, equity CEFs on average posted plus-side returns, gaining 0.81% on a NAV basis for October.
  • While for the second consecutive month, fixed income CEFs suffered negative returns (-0.05%).
  • Only 23% of all CEFs traded at a premium to their NAV, with 26% of equity CEFs and 21% of fixed income CEFs trading in premium territory.
  • Emerging Markets CEFs (+3.95%) posted the strongest positive returns of all equity CEF classifications for the month.
  • The Emerging Markets Hard Currency Debt CEFs classification (+1.33%) posted the strongest plus-side returns in the fixed income universe for the month.

Photo Source: REUTERS/Yuri Gripas. China's Vice Premier Liu He looks on during a meeting with U.S. President Donald Trump in the Oval Office of the White House in Washington, U.S., October 11, 2019.

For the month, 61% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 79% of equity CEFs and only 46% of fixed income CEFs chalking up returns in the plus column. For the second month in a row, Lipper's world equity CEFs macro-group (+2.85%) outperformed its two equity-based brethren: mixed-asset CEFs (+1.32%) and domestic equity CEFs (+0.06%). The Emerging Markets CEFs classification (+3.95%) outperformed all other equity classifications, followed by Developed Markets CEFs (+3.81%) and Sector Equity CEFs (+2.49%, September's laggard).

For the second month in a row, world income CEFs remained at the top of the leaderboard, posting a plus-side return on average (+1.01%), followed by municipal bond CEFs (+0.01%), and domestic taxable bond CEFs (-0.27%). The world income CEFs macro-group was propped up by the Emerging Markets Hard Currency Debt CEFs (+1.33%) and Global Income CEFs (+0.88%) classifications. For the eleventh month in 12, the municipal debt CEFs macro-group posted a plus-side return (+0.01%) on average, with five of the nine classifications in the group experiencing negative returns for October.

For October, the median discount of all CEFs narrowed 7 basis points (bps) to 6.36% - still narrower than the 12-month moving average median discount (7.83%). In this report, we highlight October 2019 CEF performance trends, premiums and discounts, and corporate actions and events.


This article was written by

Tom Roseen profile picture
Tom Roseen is the Head of Research Services, joining from Janus in 1996. He is the editor and an author of Lipper's U.S. Research Studies, FundFlows Insight Reports and FundIndustry Insight Reports. He is involved in fund analysis and research, and contributes to the monthly and quarterly equity and fixed income FundMarket Insight reports, webcasts and podcasts, where he focuses on domestic and world fund performance and attribution. His areas of expertise include closed-end fund analysis, portfolio evaluation, equity and fixed income fund research, fund flows analysis, after-tax performance and Lipper Leaders. Tom has a BS in finance from Metropolitan State College of Denver and a Master's in International Management from the University of Denver.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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