January 8, 2020

The Month in Closed-End Funds: December 2019

by Tom Roseen.

For the month, 95% of all closed-end funds (CEFs) posted net asset value (NAV)-based returns in the black, with 94% of equity CEFs and 96% of fixed income CEFs chalking up returns in the plus column. For the fourth month in a row, Lipper’s world equity CEFs macro-group (+3.71%) outperformed its two equity-based brethren: domestic equity CEFs (+3.56%) and mixed-asset CEFs (+2.31%). For the first month in nine, the Energy MLP CEFs classification (+10.30%, November’s laggard) outperformed all other equity classifications, followed by Natural Resources CEFs (+7.52%) and Emerging Markets CEFs (+5.53%).

For the third month in four, world income CEFs jumped to the top of the leaderboard, posting a 2.59% return on average, followed by domestic taxable fixed income CEFs (+1.83%) and municipal bond CEFs (+0.36%). The world income CEFs macro-group was propped up by the Emerging Markets Hard Currency Debt CEFs (+3.82%, the strongest performing CEF classification in the fixed income universe) and Global Income CEFs (+2.11%) classifications. For the third month in a row, the municipal debt CEFs macro-group posted a plus-side return (+0.36%) on average, with all nine classifications in the group experiencing plus-side returns for December.

For December, the median discount of all CEFs narrowed 39 basis points (bps) to 5.78%—still narrower than the 12-month moving average median discount (6.97%). In this report, we highlight December 2019 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the fourth month in a row, equity CEFs on average posted plus-side returns, gaining 3.36% on a NAV basis for December, while for the second month in a row, fixed income CEFs witnessed positive returns (+1.27%).
  • Only 24% of all CEFs traded at a premium to their NAV, with 25% of equity CEFs and 23% of fixed income CEFs trading in premium territory. The single state municipal bond CEFs macro-classification witnessed the largest narrowing of discounts for the month among Lipper’s CEF macro-groups—120 bps to 7.59%.
  • Energy MLP CEFs (+10.30%) posted the strongest positive returns of all equity CEF classifications for the month.
  • The Emerging Markets Hard Currency Debt CEFs classification (+3.82%) posted the strongest plus-side returns in the fixed income universe for the month.
  • For 2019, the average equity CEF (+19.20%) posted its strongest one-year return on a NAV basis since 2009.

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

Lipper delivers data on more than 265,000 collective investments in 61 countries. Find out more

Get In Touch

Subscribe

Related Reports

For the month, 92% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based ...

  After suffering significant losses (-4.3%) and massive net outflows ($208.9 ...

For the month, 85% of all closed-end funds (CEFs) posted net asset value (NAV)-based ...

U.S. investors pushed equity funds to their strongest quarterly performance since Q4 ...

We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.×