Weekly Closed-End Fund Roundup: January 31, 2020

Feb. 17, 2020 8:04 PM ETAFT, ASG, BGH, BTZ, BZM, CAF, ECC, ECCB, ECCX, ECCY, EDF, FIV, FXBY, GGO, GGO.PA, HGLB, IAF, JEMD, JMF, JMLP, JQC, KF, MMT, MNE, MXE, NPN, NXC, OCCI, OCCIP, PCK, PCQ, PEO, PFD, PMF, PML, PMX, PNF, PZC, RFI, RQI, SCD, TEAF, VTN1 Comment

Summary

  • 6 out of 23 CEF sectors positive on price, and 7 out of 23 sectors positive on NAV this week.
  • Munis lead while equities lag in a risk-off week.
  • No new CEF news this week.
  • I do much more than just articles at CEF/ETF Income Laboratory: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Author's note: Data in this report are from January 31, 2020. Please check latest data before making investment decisions.

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 is taken from the close of Friday, January 31st, 2020.

Weekly performance roundup

6 out of 31 sectors were positive on price (down from 14 last week), and the average price return was -0.96% (down from -0.29% last week). The leading gainers were Taxable Munis (+1.34%), Single-state Munis (+1.01%), and California Munis (+0.81%), while Asia Equity (-5.30%) lagged.

(Source: Stanford Chemist, CEFConnect)

7 out of 31 sectors were positive on NAV (down from 9 last week), while the average NAV return was -0.98% (down from -0.44% last week). The top sectors by NAV were Taxable Munis (+1.46%), California Munis (+0.66%), and New York Munis (+0.63%). The lowest sectors by NAV were MLPs (-4.39%), followed by Asia Equity (-3.80%).

(Source: Stanford Chemist, CEFConnect)

The top 3 sectors by premium were Multisector Income (+5.44%), Preferreds (+3.61%), and Emerging Market Income (+3.17%), while the sector with the highest discount is Asia Equity (-13.75%). The average sector discount is -2.69% (up from -2.72% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium/discount increase was Real Estate (+0.74%), Asia Equity (-1.34%) showed the largest premium/discount decline. The average change in premium/discount was +0.05% (down from +0.14% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is Limited Duration (+1.86) followed by Commodities (+1.57). There was only one negative z-score this week, the lowest was Asia Equity (-1.39), followed by Sector Equity (+0.19). The average z-score is +0.89 (down from +0.94 last week).

(Source: Stanford Chemist, CEFConnect)

The sectors with the highest yields are MLPs (12.61%), Emerging Market Income (9.35%), Global Allocation (9.29%), Limited Duration (8.45%), and Convertibles (8.35%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is +6.81% (up from +6.71% 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.

Fund

Ticker

P/D decrease

Yield

P/D

Z-Score

Price change

NAV change

Morgan Stanley China A Share

(CAF)

-4.19%

0.53%

-17.49%

-4.6

-6.66%

-1.90%

MFS Multimarket Income

(MMT)

-3.11%

8.29%

-3.90%

1.5

-3.30%

-0.16%

PIMCO Municipal Income

(PMF)

-3.09%

4.26%

10.30%

-0.6

-1.74%

1.03%

Korea Fund

(KF)

-3.03%

0.26%

-15.91%

-2.9

-8.63%

-5.30%

Adams Natural Resources Fund

(PEO)

-3.02%

2.68%

-14.12%

0.8

-5.70%

-2.36%

OFS Credit Company Inc

(OCCI)

-2.95%

12.42%

13.55%

1.6

-2.55%

0.00%

Mexico Equity & Income

(MXE)

-2.95%

1.05%

-6.44%

0.1

-3.77%

-0.73%

Tortoise Essential Assets Income Term

(TEAF)

-2.78%

7.95%

-10.49%

0.0

-3.93%

-0.92%

Flaherty & Crumrine Preferred Income

(PFD)

-2.62%

5.65%

7.28%

0.5

-1.61%

0.82%

Eagle Point Credit Company LLC

(ECC)

-2.58%

16.03%

55.13%

1.7

-1.64%

0.00%

(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.

Fund

Ticker

P/D increase

Yield

P/D

z-score

Price change

NAV change

Nuveen Pennsylvania Municipal Value

(NPN)

6.76%

2.83%

4.14%

3.3

7.33%

0.39%

Cohen & Steers Total Return

(RFI)

4.39%

6.24%

7.40%

1.8

3.01%

-1.17%

Liberty All-Star Growth

(ASG)

4.31%

7.44%

11.84%

3.2

2.04%

-1.88%

BlackRock MD Municipal Bond

(BZM)

3.68%

2.74%

10.04%

3.7

3.84%

0.38%

LMP Capital and Income

(SCD)

3.43%

7.99%

-2.82%

2.8

1.04%

-2.50%

Foxby Corp.

(OTCPK:FXBY)

3.29%

0.43%

-28.35%

2.4

0.44%

-4.18%

Nuveen CA Select Tax Free Income

(NXC)

3.09%

3.21%

2.25%

1.5

3.68%

0.57%

Aberdeen Australia Equity Fund Inc

(IAF)

2.79%

10.22%

-5.68%

1.3

-0.72%

-3.65%

Nuveen Emrg Mkts Debt 2022 Target Term

(JEMD)

2.72%

4.84%

4.61%

2.8

1.97%

-0.67%

Gabelli Go Anywhere Trust

(GGO)

2.09%

5.32%

-10.43%

-0.5

-2.40%

-4.66%

(Source: Stanford Chemist, CEFConnect)

Recent corporate actions

These are from the past month. Any new news in the past week has a bolded date:

None.

Upcoming corporate actions

These are from the past month. Any new news in the past week has a bolded date:

Jan 7, 2020 | Cohen & Steers Quality Income Realty Fund, Inc. Announces Terms of Rights Offering. Cohen & Steers Quality Income Realty Fund, Inc. (RQI) (the "Company") today announced that its Board of Directors (the "Board") has approved the terms of the issuance of transferable rights ("Rights") to the holders of the Company's common stock (par value $0.001 per share) ("Common Stock"), as of the record date, January 17, 2020 (the "Record Date"). Certain key terms of the Offer include:

  • Holders of Common Stock on the Record Date ("Record Date Stockholders") will receive one Right for each outstanding share of Common Stock owned on the Record Date. The Rights entitle the holders to purchase one new share of Common Stock for every 3 Rights held (1-for-3).
  • The subscription price per share of Common Stock (the "Subscription Price") will be determined on the expiration date of the Offer, which is currently expected to be February 13, 2020, unless extended by the Company (the "Expiration Date"), and will be equal to 95% of the average of the last reported sales price of a share of Common Stock of the Company on the New York Stock Exchange (the "NYSE") on the Expiration Date and each of the four (4) immediately preceding trading days (the "Formula Price"). If, however, the Formula Price is less than 90.25% of the Company's NAV per share of Common Stock at the close of trading on the NYSE on the Expiration Date, the Subscription Price will be 90.25% of the Company's NAV per share of Common Stock at the close of trading on the NYSE on that day.
  • Record Date Stockholders who fully exercise all Rights issued to them can subscribe, subject to certain limitations and allotment, for any additional shares of Common Stock which were not subscribed for by other holders of Rights at a discount to the market price. Investors who are not Record Date Stockholders but who otherwise acquire Rights, are not entitled to subscribe for any additional shares of Common Stock. If sufficient shares of Common Stock are available, all Record Date Stockholders' over-subscription requests will be honored in full. If these requests exceed available shares of Common Stock, they will be allocated pro rata among Record Date Stockholders based on the number of Rights originally issued to them by the Company.
  • Rights are transferable and are expected to be admitted for trading on the NYSE under the symbol "RQI RT" during the course of the Offer, January 17 through February 13, 2020. During this time, Record Date Stockholders may also choose to sell their Rights.

January 2, 2020 | BlackRock Credit Allocation Income Trust Announces Commencement of Tender Offer. BlackRock Credit Allocation Income Trust (BTZ) announced that it has today commenced a tender offer (the "Tender Offer"). As previously announced, the Fund will purchase for cash up to 10% of its outstanding common shares of beneficial interest, at a price equal to 98% of the net asset value ("NAV") per share as determined on the business day on which the Tender Offer expires. The Tender Offer will expire on February 3, 2020 at 5:00 p.m. Eastern time, unless otherwise extended.

December 19, 2019 | BlackRock Announces Board Approval of a Merger of a Municipal Closed-End Fund into a Municipal Open-End Fund. BlackRock Advisors, LLC announced today that the Board of Directors of BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE), a closed-end fund, and the Board of Trustees of BlackRock Multi-State Municipal Series Trust ("Multi-State Municipal Series Trust") approved the merger of MNE into BlackRock New York Municipal Opportunities Fund ("NYMO"), an open-end mutual fund and a series of Multi-State Municipal Series Trust, with NYMO being the surviving Fund (the "Merger"). It is currently expected that the Merger will be completed in the first half of 2020 subject to approval by MNE shareholders, the satisfaction of customary closing conditions and the prior redemption of all of MNE's outstanding variable rate demand preferred shares.

December 9, 2019 | Liberty All-Star® Growth Fund, Inc. Announces Rights Offering. The Board of Directors (the "Board") of Liberty All-Star® Growth Fund, Inc. (ASG) (the "Fund") has authorized and set the terms of an offering to the Fund's shareholders of rights to purchase additional shares of the Fund. Shareholders on a record date to be established by the Fund's Board would be issued non-transferable rights entitling them to subscribe for one additional share for every five shares held (the "Primary Subscription"), with the right to subscribe for additional shares not subscribed for by others in the Primary Subscription. If such over-subscription requests exceed the number of shares available, the Fund may, in its sole discretion, elect to issue additional shares in an amount of up to 25% of the shares issued in the Primary Subscription. The subscription price per share will be 95 percent of the reported net asset value or market price per share, whichever is lower on the expiration date. Market price per share will be determined based on the average of last reported sales prices of a share on the New York Stock Exchange on the expiration date and the four trading days preceding the expiration date. The offering is subject to the effectiveness of the Fund's Registration Statement to be filed with the Securities and Exchange Commission ("SEC") and will be made only by means of a prospectus.

Recent activist or other CEF news

These are from the past month. Any new news in the past week has a bolded date:

None.

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 year-end special distributions messing up my algorithm for calculating distribution changes, we will not be presenting the boosters and cutters until I have figured out a way to automate this.

For now, please this Morningstar post for January distribution announcements (h/t acamus). The following are from that thread:

  • (JMF) decreased 4%
  • (JMLP) decreased 6%
  • (JQC) decreased 11%
  • (PMF) decreased 10%
  • (PCQ) decreased 16%
  • (PNF) decreased 21%
  • (PML) decreased 9%
  • (PCK) decreased 9%
  • (PMX) decreased 9%
  • (PZC) decreased 9%
  • (VTN) decreased 9%
  • (AFT) decreased 4%
  • (BGH) decreased 5%
  • (HGLB) decreased 21%
  • (FIV) decreased 18%
  • (EDF) decreased 6%

Of these, only one fund, PMX is a portfolio holding. PMX is held in our Taxable Income portfolio.

CEF analysis from around Seeking Alpha...

ADS presents EDI And EDF: 2 Additional Puzzles For These Emerging Market Closed-End Funds (Jan. 27), EAD: Multiple Factors Should Support This High-Yield Fund (Jan. 29), FPF Remains Our Top Pick In Preferred CEFs (Jan. 30)

Alpha Gen Capital presents Weekly CEF Commentary | January 12, 2019 (Jan. 31)

Arbitrage Trader presents Weekly Review: High-Yield CEFs - Slight Panic In The Sector (Jan. 29), Weekly Review: Municipal Bond CEFs - Focus Again On Safer Assets (Jan. 31)

BOOX Research presents Stone Harbor Emerging Markets Income: Dividend Cut Is The Latest Bearish Signal (Jan. 26), ETV: 8.9% Yield And A Defensive Approach To Large-Cap Equity Exposure (Jan. 30)

George Spritzer presents Check Out Urbana Corp.: A Canadian Investment Company Trading At A 48% Discount (Jan. 28)

Harrison Schwartz presents GGN: A 14% Yield CEF That Is In An Improving Macro Backdrop (Jan. 29)

*Nick Ackerman presents DFP: 6.41% Yielding Income Opportunity (Jan. 30)

Power Hedge presents NTG: Significant Improvements, Worth Considering (Jan. 28), RNP: An Income Fund For The Risk-Averse Investor (Jan. 28), STK: A High-Yielding Technology CEF That Is Also Overpriced (Jan. 30)

*Stanford Chemist presents Weekly Closed-End Fund Roundup: January 10, 2020 (Jan. 26), The Chemist's 'High-High-Low' Closed-End Fund Report: December 2019 (Jan. 30), HIO: An Unleveraged High-Yield CEF With A Potential Activist Kicker (Jan. 31)

*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: An 'Overbought' Market Catches A Virus (Feb. 1)

Jeff Miller presents Weighing The Week Ahead: Coronavirus - Analysis Or Paralysis? (Feb. 2)

Lance Roberts presents 'SARS' Vs. 'Wuhan': The Difference Between 'Now And Then' (Jan. 30)

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