Weekly Review Of Preferred Stock CEFs: The Leading Benchmark Made A New High

Summary

• The leading benchmark made a 52-week high.
• Several closed-end funds announced their regular distributions.
• Funds in the preferred stock sector continued increasing their prices and net asset values during the past week.
• This idea was discussed in more depth with members of my private investing community, Trade With Beta. Get started today »

Introduction

The past week was quite successful for the funds which invest in preferred stocks and bonds. The leading benchmark for the sector made a 52-week high and most of the closed-end funds increased their net asset values and prices as well. Judging by the criterias from beneath that we will soon take a brief look at, the group seems a little bit overvalued.

Before we take a look at these funds, I just want to say that the main purpose of this article is to keep you updated with sector and the funds in it. Most of our trade candidates are suggested for a short-term trading, judging by the criterias below and some other signals, so we can use a short movement of a CEF or as a hedge for some of our long-term investments which we have in our portfolios.

The News

There are no important news during the past week:

Source: Yahoo.finance.com

The Benchmark

As we already mentioned the leading benchmark of the preferred stock sector (PFF) made its 52-week high closing the week at a price of $37.92 per share.

Source: Barchart.com - PFF Daily Chart (6 months)

As you know, we follow the performance of the U.S. Treasury bonds - considering them a risk-free product - with maturities greater than 20 years: the iShares 20+ Year Treasury Bond ETF (TLT). The past week was negative for the bond ETF. On Friday TLT closed at a price of $138.44 per share which on a weekly basis is a drop of $0.72 per share or 0.52%.Source: Barchart.com - TLT Daily Chart (6 months)

Below we can see where is the 10-Year Treasury rates:

Source: cnbc.com - 10 Year Treasuries

1. Sorted By Z-Score

Source: cefconnect.com

Over the past week, there have been little changes in the leading positions. For

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