Fixed-income CEFs on sale as rates rise

|By:, SA News Editor

Relative Value Partners founder Maury Fertig names two floating-rate bond funds which should be able to adjust as rates rise, but find themselves trading at discounts to NAV: BlackRock Floating Rate Strategies (NYSE:FRA) and Pioneer Floating Rate Trust (NYSE:PHD).

Then there's two  short-duration funds which should be plenty stable thanks to their low duration, but also trade at sizable discounts: Eaton Vance Short Duration Diversified Income Fund (NYSE:EVG) - a 1.3 year duration, a yield of 8.2%, and selling at a 12% discount to NAV. Nuveen Mortgage Opportunity Trust (NYSE:JLS) - a 6% yield and selling at an 8% discount.