The Month In Closed-End Funds: May 2022

Jun. 07, 2022 5:33 PM ETNDP, RCG, PEO, BGR, CEM, NHYEX, NMSSX, PCK, RMMZ, PNF2 Likes
Tom Roseen profile picture
Tom Roseen


  • For the second month in three, equity CEFs on average witnessed positive returns, rising 0.73% on a NAV basis for May.
  • While for the fifth consecutive month, fixed income CEFs posted returns in the red (-0.40%).
  • Only 20% of all CEFs traded at a premium to their NAV at month end, with 24% of equity CEFs and 16% of fixed income CEFs trading in premium territory.
  • Natural Resources CEFs (+8.98%) outpaced the other classifications in the equity CEF universe for May.
  • For the first month in five, the municipal debt CEFs macro-group posted a plus-side return (+2.00%, on average), with all nine classifications experiencing positive performance.

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For the month, 52% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 40% of equity CEFs and 62% of fixed income CEFs chalking up returns in the plus column. For the sixth month in a row, Lipper's domestic equity CEFs (+1.16%) macro-group outshined its two equity-based brethren: world equity CEFs (+1.11%) and mixed-assets CEFs (-1.02%). Given the continued rise in crude oil prices and select commodities, it wasn't surprising to see the Natural Resources CEFs classification (+8.98%) move to the top of the equity leaderboard for the month, followed by Energy MLP CEFs (+7.12%) and Utility CEFs classification (+3.44%).

For the first month in three, the municipal debt CEFs macro-group outpaced the other macro-groups in the fixed income universe, posting a 2.00% return on average, followed by world income CEFs (-0.31%) and domestic taxable bond CEFs (-1.90%). Fixed income investors focused on attractive opportunities in the municipal debt market and a slight drop in Treasury yields during the month. For the first month in 11, investors pushed Corporate Debt BBB-Rated CEFs (+0.27%, April's laggard) to the top of the domestic taxable fixed income leaderboard, followed by Corporate Debt BBB-Rated CEFs (Leveraged) (-0.07%) and U.S. Mortgage CEFs (-0.73%).

For May, the median discount of all CEFs narrowed 52 basis points (bps) to 7.48%-wider than the 12-month moving average median discount (3.99%). In this report, we highlight May 2022 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.

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.

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