The Month In Closed-End Funds: March 2022

Apr. 09, 2022 12:22 AM ETTYG, SMM, NML, UTG, NDP, CEDIX, CEDAX, CEDLX, CEDTX, FT2 Likes
Tom Roseen profile picture
Tom Roseen
1.45K Followers

Summary

  • For the first month in three, equity CEFs on average witnessed positive returns, rising 1.91% on an NAV basis for March.
  • While for the third consecutive month, fixed income CEFs posted returns in the red (-2.18%).
  • Only 20% of all CEFs traded at a premium to their NAV at month-end, with 27% of equity CEFs and 14% of fixed income CEFs trading in premium territory.
  • Natural Resources CEFs (+7.04%) posted the strongest one-month returns of the equity classifications in the CEF universe for March.
  • For the third consecutive month, the Loan Participation CEFs (+0.06%) classification outpaced the other classifications in the fixed income CEF universe for March.

Business on Wall Street in Manhattan

Pgiam/iStock via Getty Images

For the month, only 44% of all closed-end funds (CEFs) posted net-asset-value (NAV) based returns in the black, with 79% of equity CEFs and just 18% of fixed income CEFs chalking up returns in the plus column. For the fourth month in a row, Lipper’s domestic equity CEFs (+3.37%) macro-group outpaced its two equity-based brethren: mixed-assets CEFs (+0.57%) and world equity CEFs (-1.31%). Given the continued rise in commodities and crude oil prices, it wasn’t surprising to see the Natural Resources CEFs classification (+7.04%) jump to the top of the equity leaderboard for the month, followed by Energy MLP CEFs (+6.96%, February’s leader) and Utility CEFs (+6.69%).

For the first month in three, the world income CEFs macro-group chalked up the strongest relative returns in the fixed income universe, posting a 0.14% decline on average, followed by domestic taxable bond CEFs (-0.65%) and municipal debt CEFs (-4.95%). Fixed income investors focused their attention on imminent interest rate hikes and inflation during the month. They kept Loan Participation CEFs (+0.06%) at the top of the domestic taxable fixed income leaderboard for the third consecutive month, followed by High Yield CEFs (Leveraged) (-0.62%) and General Bond CEFs (-0.65%).

For March, the median discount of all CEFs narrowed 10 bps to 6.30% — wider than the 12-month moving average median discount (3.27%). In this report, we highlight March 2022 CEF performance trends, premiums and discounts, and corporate actions and events.

16

This article was written by

Tom Roseen profile picture
1.45K Followers
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.
Follow

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.