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The Month In Closed-End Funds: February 2020

Mar. 05, 2020 5:45 PM ETCHN, TDF, TIPWX, TIPLX, TIPRX, NMCO, NZF, BBN, PCK, NBB, PML, FT2 Comments
Tom Roseen profile picture
Tom Roseen


  • For the second month in a row, equity CEFs on average posted negative returns, declining 6.90% on a NAV basis for February.
  • While for the fourth month in a row, fixed income CEFs witnessed positive returns (+0.15%).
  • Only 13% of all CEFs traded at a premium to their NAV, with 12% of equity CEFs and 13% of fixed income CEFs trading in premium territory.
  • Real Estate CEFs (-2.46%) mitigated losses better than the other equity CEF classifications for the month.
  • For the fifth consecutive month, the municipal bond CEF (+2.12%) macro-group posted plus-side returns, with all nine classifications in the group posting returns in the black.

Photo Source: REUTERS/Kim Kyung-Hoon. A man wearing a face mask rides the subway amid the rise in confirmed cases of coronavirus disease (COVID-19) in Daegu, South Korea, March 5, 2020.

For the month, only 33% of all closed-end funds (CEFs) posted net asset value (NAV)-based returns in the black, with just 8% of equity CEFs and 52% of fixed income CEFs chalking up returns in the plus column. For the second month in a row, Lipper’s mixed-asset CEFs (-4.66%) mitigated losses better than or outperformed its two equity-based brethren: world equity CEFs macro-group (-6.50%) and domestic equity CEFs (-7.68%). For the first month in nine, the Real Estate CEFs classification (-2.46%) mitigated losses better than or outperformed all other equity classifications, followed by Convertible Securities CEFs (-4.58%) and Income & Preferred Stock CEFs (-4.68%).

For the second consecutive month, municipal bond CEFs remained at the top of the leader board, posting a 2.12% return on average, followed by domestic taxable fixed income CEFs (-1.23%) and world income CEFs (-1.55%). On the domestic taxable fixed income side, the Corporate Debt BBB-Rated CEFs classification took the top honors, returning 0.84%, followed by U.S. Mortgage CEFs (+0.83%) and Corporate Debt BBB-Rated CEFs (Leveraged) (-0.13%).

For February, the median discount of all CEFs widened 313 basis points (bps) to 8.08% - wider than the 12-month moving average median discount (6.73%). In this report, we highlight February 2020 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.

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. I have no business relationship with any company whose stock is mentioned in this article.

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