December 5, 2019

The Month in Closed-End Funds: November 2019

by Tom Roseen.

For the first month in seven, domestic taxable bond CEFs jumped to the top of the leaderboard, posting a 0.44% return on average, followed by municipal bond CEFs (+0.24%) and world income CEFs (-0.21%). The world income CEFs macro-group was dragged down by the Emerging Markets Hard Currency Debt CEFs (-1.03%) and Global Income CEFs (+0.12%) classifications. For the second month in a row, the municipal debt CEFs macro-group posted a plus-side return (+0.24%) on average, with all nine classifications in the group experiencing plus-side returns for November.

For November, the median discount of all CEFs narrowed 19 bps to 6.17%—still narrower than the 12-month moving average median discount (7.49%). In this report, we highlight November 2019 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the third month in a row, equity closed-end funds (CEFs) on average posted plus-side returns, gaining 0.45% on a net-asset-value (NAV) basis for November, while for the first month in three, fixed income CEFs witnessed positive returns (+0.31%).
  • Only 23% of all CEFs traded at a premium to their NAV, with 27% of equity CEFs and 20% of fixed income CEFs trading in premium territory. The domestic equity CEFs macro-classification witnessed the largest narrowing of discounts for the month among Lipper’s CEF macro-groups—133 basis points (bps) to 2.92%.
  • Sector Equity CEFs (+2.78%) posted the strongest positive returns of all equity CEF classifications for the month.
  • The Loan Participation CEFs classification (+0.63%) posted the strongest plus-side returns in the fixed income universe for the month.
  • For second month in a row, the municipal debt CEFs macro-group posted a plus-side return on average (+0.24%), with all nine classifications in the group witnessing plus-side returns for November.

Download our Closed-End Funds FundMarket Insight Report: The Month in Closed-End Funds: November 2019 here.

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