Weekly Closed-End Fund Roundup: HQH And GGZ Boosts, GUT And OXLC N-2s (February 21, 2020)
Summary
- 12 out of 23 CEF sectors positive on price and 8 out of 23 sectors positive on NAV this week.
- Franklin Resources buys Legg Mason.
- HQH and GGZ boosts their distributions.
- GUT and OXLC have filed for N-2s.
- Looking for a helping hand in the market? Members of CEF/ETF Income Laboratory get exclusive ideas and guidance to navigate any climate. Get started today »
Author's note: This article was released to CEF/ETF Income Laboratory members on Feb. 24, 2020.
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, February 21st, 2019.
Weekly performance roundup
12 out of 31 sectors were positive on price (down from 20 last week) and the average price return was +0.14% (up from +0.42% last week). The leading gainers were Commodities (+5.63%), Taxable Munis (+2.24%) and California Munis (+0.78%) while MLPs (-2.52%) lagged.
(Source: Stanford Chemist, CEFConnect)
8 out of 31 sectors were positive on NAV (down from 15 last week), while the average NAV return was -0.01% (down from +0.47% last week). The top sectors by NAV were Commodities (+4.75%), Taxable Munis (+1.43%) and California Munis (+0.98%). The lowest sectors by NAV were MLPs (-2.48%) followed by Asia Equity (-1.08%).
(Source: Stanford Chemist, CEFConnect)
The top 3 sectors by premium were Multisector Income (+6.75%), Emerging Market Income (+5.08%) and Preferreds (+4.85%), while the sector with the highest discount is Asia Equity (-13.10%). The average sector discount is -2.17% (up from -2.34% last week).
(Source: Stanford Chemist, CEFConnect)
The sector with the highest premium/discount increase was Emerging Market Income (+0.89%), Asia Equity (-1.18%) showed the largest premium/discount decline. The average change in premium/discount was +0.17% (up from -0.06% last week).
(Source: Stanford Chemist, CEFConnect)
The sector with the highest average 1-year z-score is Limited Duration (+2.17) followed by Commodities (+1.93). There was one negative z-scores this week, the lowest was Asia Equity (-0.85), followed by Sector Equity (+0.38). The average z-score is +1.07 (up from +1.03 last week).
(Source: Stanford Chemist, CEFConnect)
The sectors with the highest yields are MLPs (12.29%), Global Allocation (9.14%), Emerging Market Income (9.14%), Limited Duration (8.33%) and Senior Loans (8.19%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is +6.69% (down from +6.70% 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 |
MainStay MacKay DefinedTerm Muni Opp | (MMD) | -5.72% | 4.76% | 2.49% | 0.5 | -4.80% | 0.53% |
BlackRock MD Municipal Bond | (BZM) | -4.55% | 2.88% | 4.50% | 1.6 | -3.52% | 0.70% |
Korea Fund | (KF) | -4.44% | 0.25% | -16.19% | -3.2 | -6.01% | -0.99% |
PIMCO NY Municipal Income III | (PYN) | -3.41% | 4.23% | 4.79% | -0.4 | -2.14% | 1.05% |
BlackRock Munienhanced | (MEN) | -3.36% | 4.00% | -7.22% | 0.2 | -2.42% | 1.12% |
Western Asset Mortgage Defined Opp | (DMO) | -3.25% | 8.76% | 4.53% | -1.6 | -3.52% | -0.51% |
Tortoise Energy Infrastructure Corp. | (TYG) | -2.85% | 10.10% | -8.85% | -3.0 | -6.96% | -4.02% |
Nuveen High Income 2023 Target Term Fund | (JHAA) | -2.45% | 5.84% | 3.45% | 0.6 | -2.41% | -0.10% |
Massachusetts Tax-Exempt Trust | (MHE) | -2.39% | 3.49% | -3.87% | 0.9 | -1.68% | 0.78% |
RiverNorth Opp Muni Income Fund Inc | (RMI) | -2.36% | 4.79% | -4.41% | 0.2 | -1.54% | 0.92% |
(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 |
Royce Global ValueTrust Fund | (RGT) | 5.13% | 0.49% | -8.83% | 4.9 | 4.86% | -1.03% |
Gabelli Utility Trust | (GUT) | 4.42% | 7.48% | 53.93% | 1.0 | 3.35% | 0.39% |
Neuberger Berman Municipal | (NBH) | 3.83% | 4.57% | 4.26% | 2.1 | 4.53% | 0.70% |
BlackRock Long-Term Muni Advantage | (BTA) | 3.50% | 4.44% | 3.41% | 2.5 | 4.44% | 0.92% |
Cohen & Steers MLP Income and Energy Opp | (MIE) | 3.46% | 10.08% | 7.85% | 2.0 | 0.28% | -2.93% |
Legg Mason BW Global Inc. Opp Fund | (BWG) | 2.86% | 6.23% | -7.80% | 3.4 | 2.98% | -0.20% |
Western Asset Variable Rate Strategic | (GFY) | 2.78% | 5.45% | -3.94% | 2.8 | 2.39% | -0.56% |
Gabelli Multi-Media | (GGT) | 2.75% | 10.53% | 3.98% | 0.0 | 2.45% | -0.25% |
Mexico Equity & Income | (MXE) | 2.71% | 1.02% | -7.87% | 2.8 | 0.60% | -2.36% |
Western Asset Global High Income | (EHI) | 2.68% | 7.59% | -5.61% | 3.9 | 2.45% | -0.45% |
(Source: Stanford Chemist, CEFConnect)
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.
Cutters
Name | Ticker | Change | Previous | Current | Yield | Discount | z-score | Coverage | Announced | Ex-date |
Tortoise Midstream Energy Fund | (NTG) | -44.4% | 0.4225 | 0.235 | 9.94% | -9.13% | -2.5 | 322% | 2/12/2020 | 2/20/2020 |
Tortoise Energy Infrastructure Corp. | (TYG) | -39.7% | 0.655 | 0.395 | 10.10% | -8.85% | -3.0 | 312% | 2/12/2020 | 2/20/2020 |
Eaton Vance High Income 2021 Target Term | (EHT) | -18.9% | 0.037 | 0.03 | 3.60% | -0.30% | 0.3 | 760% | 2/3/2020 | 2/12/2020 |
Invesco Value Muni Income | (IIM) | -4.8% | 0.0588 | 0.056 | 4.23% | -6.08% | 0.9 | 593% | 2/3/2020 | 2/13/2020 |
Invesco Tr Inv Gr Muni | (VGM) | -4.5% | 0.0516 | 0.0493 | 4.46% | -6.62% | 1.0 | 582% | 2/3/2020 | 2/13/2020 |
Invesco Adv Muni Inc II | (VKI) | -4.4% | 0.045 | 0.04301 | 4.50% | -6.67% | 0.5 | 596% | 2/3/2020 | 2/13/2020 |
Invesco Muni Opp | (VMO) | -4.4% | 0.05 | 0.0478 | 4.43% | -6.03% | 1.3 | 590% | 2/3/2020 | 2/13/2020 |
MFS Municipal Income | (MFM) | -1.9% | 0.027 | 0.0265 | 4.36% | -4.20% | 1.1 | 636% | 2/3/2020 | 2/18/2020 |
MFS Investment Grade Municipal | (CXH) | -1.3% | 0.036 | 0.03555 | 4.20% | -7.54% | 1.5 | 620% | 2/3/2020 | 2/18/2020 |
MFS Intermediate Income | (MIN) | -0.1% | 0.02828 | 0.02825 | 8.83% | -4.00% | 1.9 | 184% | 2/3/2020 | 2/18/2020 |
Boosters
Name | Ticker | Change | Previous | Current | Yield | Discount | z-score | Coverage | Announced | Ex-date |
Lazard Global Total Return and Income | (LGI) | 0.1% | 0.1064 | 0.10646 | 7.67% | -9.65% | 0.8 | 134% | 2/14/2020 | 3/11/2020 |
MFS Intermediate High Income | (CIF) | 0.1% | 0.02046 | 0.02049 | 8.38% | 13.75% | 2.0 | 331% | 2/3/2020 | 2/18/2020 |
Invesco Municipal Inc Opp I | (OIA) | 0.2% | 0.03155 | 0.0316 | 4.64% | 3.16% | 0.7 | 578% | 2/3/2020 | 2/13/2020 |
Templeton Emerg Mkts Income | (TEI) | 0.2% | 0.0609 | 0.061 | 7.91% | -5.52% | 2.0 | 610% | 2/3/2020 | 2/14/2020 |
MFS Charter Income | (MCR) | 0.3% | 0.05978 | 0.05997 | 8.40% | -5.30% | 1.8 | 297% | 2/3/2020 | 2/18/2020 |
MFS Multimarket Income | (MMT) | 0.5% | 0.04257 | 0.04277 | 8.26% | -3.72% | 1.3 | 331% | 2/3/2020 | 2/18/2020 |
Franklin Limited Duration Income Trust | (FTF) | 0.5% | 0.0834 | 0.0838 | 10.35% | -3.19% | 2.3 | 311% | 2/18/2020 | 2/27/2020 |
MFS Special Value | (MFV) | 0.6% | 0.04738 | 0.04767 | 8.14% | 22.90% | 2.3 | 164% | 2/3/2020 | 2/18/2020 |
Delaware Enhanced Global Div and Inc | (DEX) | 0.8% | 0.0919 | 0.0926 | 10.55% | -4.79% | 2.2 | 177% | 2/4/2020 | 2/20/2020 |
Delaware Investments Dividend & Income | (DDF) | 1.2% | 0.0914 | 0.0925 | 7.12% | 41.56% | 1.8 | 120% | 2/4/2020 | 2/20/2020 |
Angel Oak Financial Strats Income Term | (FINS) | 1.4% | 0.1097 | 0.1112 | 6.43% | 1.37% | 0% | 2/3/2020 | 2/13/2020 | |
Templeton Global Income | (GIM) | 2.1% | 0.0288 | 0.0294 | 5.81% | -8.45% | 1.5 | 715% | 2/3/2020 | 2/14/2020 |
Eaton Vance Floating-Rate Income | (EFT) | 6.1% | 0.0792 | 0.084 | 7.21% | -6.74% | 2.4 | 555% | 2/3/2020 | 2/20/2020 |
Eaton Vance CA Municipal Bond | (EVM) | 6.8% | 0.0366 | 0.0391 | 3.95% | -7.40% | 2.4 | 552% | 2/3/2020 | 2/20/2020 |
Calamos Strategic Total Return | (CSQ) | 12.1% | 0.0825 | 0.0925 | 7.77% | 1.78% | 3.0 | 89% | 2/3/2020 | 2/13/2020 |
Gabelli Global Small & Mid Cap Value Tru | (GGZ) | 14.3% | 0.14 | 0.16 | 1.35% | -15.07% | 0.2 | -33% | 2/12/2020 | 3/16/2020 |
Tekla Healthcare Investors | (HQH) | 14.6% | 0.41 | 0.47 | 8.70% | -9.85% | 0.6 | -6% | 2/18/2020 | 2/27/2020 |
Eaton Vance Municipal Bond | (EIM) | 15.6% | 0.0429 | 0.0496 | 4.45% | -6.76% | 1.5 | 530% | 2/3/2020 | 2/20/2020 |
CEF analysis from around Seeking Alpha...
ADS presents PHT: A Pick From Our CEF Screen (Feb. 17), Why A Fund Of Muni CEFs Can Make Sense For Your Portfolio (Feb. 18), These CEF Sector Distributions Are Holding Up (Feb. 20), What Works In Muni CEFs (Feb. 21)
Alpha Gen Capital presents PDI And PCI: An Update To The Greatest Bond Funds Of All Time (Feb. 21)
Arbitrage Trader presents Weekly Review: High-Yield CEFs - The Benchmark Again Close To Its Highest Price (Feb. 20), Weekly Review: Municipal Bond CEFs - Slight Increase For The Sector (Feb. 21)
Bridger Research presents ADX: 8.6% Yielding CEF, Supported By Continued Rotation Into Large-Cap Growth Stocks (Feb. 21)
Dividend Seeker presents PCQ: Mixed Outlook For The Year Ahead (Feb. 19)
Dividend Sleuth presents Adams Diversified Equity: Growth With 6% Target Distribution (Feb. 21)
Douglas Albo presents Equity CEFs: The Absurdity Of Today's Investment Environment (A Look At BSTZ) (Feb. 19)
Mark J. Grant presents The 'Borrower's Paradise' Continues (Feb. 16)
Nick Ackerman presents VAM: Quick Take On This 10%+ Yielder And Merger News (Feb. 17), A Victory Lap On 8.3%+ Yielding, Market-Crushing PCI (Feb. 18), GGN: Stay Cautious And Vigilant On This CEF (Feb. 19)
Power Hedge presents JPC: An Interesting Proposition For Income Investors, But Not The Best Fund Around (Feb. 17), IGR: A Compelling Global Real Estate Fund That Trades At A Nice Discount (Feb. 18)
Rida Morwa presents CEN: Coasting Toward A Distribution Cut (Feb. 20)
*Stanford Chemist presents 3 Swap Opportunities In Closed-End Funds (Feb. 17), Weekly Closed-End Fund Roundup: January 31, 2020 (Feb. 17), The Chemist's Quality Closed-End Fund Report: January 2020 (Feb. 18), Expense Ratios And Financial Highlights (Feb. 18)
*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: Market Highs, Gold Soars, And Interest Rates Plunge (Feb. 23)
Jeff Miller presents Weighing The Week Ahead: Investors (Still) Have Much To Learn From Mr. B (Feb. 24)
Lance Roberts presents MacroView: Japan, The Fed, And The Limits Of QE (Feb. 22)
Commentary
The major news affecting closed-end funds this week was the announcement that Franklin Resources (BEN) is buying up Legg Mason (LM), including its closed-end fund business.
Other than that though, not much else was going on. Tekla Healthcare Investors (HQH) boosted its quarterly distribution by +14.6% (from $0.41 to $0.47/share), in line with its 8% NAV distribution program. This means that the distribution generally follows the NAV, so the boost shouldn't have been a major surprise. HQH yields 8.70% at today's prices, and last closed with a discount of -9.85%. We have it rated as "buy" in our Tactical Income-100 portfolio. Nick wrote about HQH recently for us here.
The Gabelli Global Small and Mid Cap Value Trust (GGZ) also announced a boost in its quarterly distribution, going from $0.14 to $0.16/share (+14.3%). GGZ last closed with a discount of -14.71% and a yield of 5.41%.
Oxford Lane Capital Corp. (OXLC) (N-2 filing) and Gabelli Utility Trust (GUT) (N-2 filing) both have N-2s on file. Nick explained what an N-2 filing could lead to here: Income Lab Ideas: How Do Closed-End Funds Grow Their Share Count? (Form N-2). In the case of GUT specifically, if I were an investor, I'd be concerned about what a rights offering announcement would do to the share price given that the fund currently trades at a stratospheric premium of +54.23%. When GUT last conducted a rights offering in 2018 (which was, not-so-coincidentally, the last time the premium reached +50%), the result wasn't pretty:
With OXLC, I'm more inclined to think that the N-2 filing is a continuation of their at-the-market ("ATM") program, but we will know for sure fairly soon.
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This article was written by
Stanford Chemist is a scientific researcher by training. For the past decade he has been providing analysis and evidence-based ways of generating profitable investments with CEFs and ETFs. He leads the investing group Learn more.
Analyst’s Disclosure: I am/we are long THE STOCKS IN OUR PREMIUM PORTFOLIOS. 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.
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Comments (19)
Yes. Intend to upsize my position.
