Strange goings ons right now as the market shoots higher off the strong jobs number even as some CEFs are being sold down hard.
The most obvious is the Eaton Vance Tax-Managed Global fund (NYSE:EXG), $8.28 market price, $9.12 NAV, -9.2% discount, 11.0% current market yield, which was down -3.5% yesterday and is still being sold pre-market here. This despite EXG's NAV being up $0.02 yesterday and up a healthy 4.65% YTD. Though I did not own EXG, and indeed any Eaton Vance CEFs before today, I am buying some EXG pre-market as this looks to be a liquidation by someone who is throwing in the towel on some strategy (long/short maybe) that is not working or is getting out of a carry trade ahead of an interest rate raise next week.
The fact that EXG cut its distribution a week ago, Eaton Vance Cuts Distributions On Several Option-Income CEFs, might be a catalyst as well. Still, EXG offers a very high 11.0% current market yield that will still be quite attractive to investors once the dust settles. More importantly, EXG's NAV yield is 100 bps lower at 10.0%, which is still higher than I would like to see but better than before the distribution cut.
I'm going to open this up to readers if you would like to get anything off your chest. CEFs started 2017 strongly out of the gate but lately, some fund classes, REITs and municipal bonds especially, have fallen hard and that may be affecting other CEFs as well. Still, many CEFs are at multi-year highs currently so this is not across the board by any means.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in EXG over the next 72 hours.