April 6, 2020

The Month in Closed-End Funds: March 2020

by Tom Roseen.

For the month, only 3% of all closed-end funds (CEFs) posted net asset value (NAV)-based returns in the black, with just 5% of equity CEFs and only 1% of fixed income CEFs chalking up returns in the plus column. For the third month in a row, Lipper’s mixed-asset CEFs (-17.81%) mitigated losses better than or outperformed its two equity-based brethren: world equity CEFs macro-group (-18.10%) and domestic equity CEFs (-22.21%). For the second month in a row, the Real Estate CEFs classification (-10.79%) mitigated losses better than or outperformed all other equity classifications, followed by Options Arbitrage/Options Strategies CEFs (-11.62%) and Sector Equity CEFs (-14.25%). Energy MLP CEFs (-63.74%) posted the largest losses of the equity universe.

For the third consecutive month, municipal bond CEFs remained at the top of the leaderboard, posting a minus 8.25% return on average, followed by domestic taxable fixed income CEFs (-15.84%) and world income CEFs (-17.69%). Investors became more risk averse during the month, questioning the credit quality of risky assets and causing credit spreads to widen significantly, with Emerging Markets Hard Currency Debt CEFs (-21.45%) posting the largest declines for the month and weighing on the world income CEFs macro-group.

For March, the median discount of all CEFs widened 170 basis points (bps) to 9.78%—wider than the 12-month moving average median discount (6.89%). In this report, we highlight March 2020 CEF performance trends, premiums and discounts, and corporate actions and events.


  • For the third month in a row, equity CEFs on average posted negative returns, declining 20.64% on a NAV basis for March (their worst one-month decline since October 31, 2008), while for the first month in five, fixed income CEFs witnessed returns in the red (-12.80%, their worst monthly loss in at least 35 years).
  • Only 12% of all CEFs traded at a premium to their NAV, with 13% of equity CEFs and 12% of fixed income CEFs trading in premium territory. The world income CEFs macro-classification witnessed the largest widening of discounts for the month among Lipper’s CEF macro-groups—358 bps to 10.26%.
  • Once again, Real Estate CEFs (-10.79%) mitigated losses better than the other equity CEF classifications for the month.
  • Energy MLP CEFs (-63.74%) and Natural Resources CEF (-38.59%) were crushed in March as the perfect storm caused near-month crude oil prices to get trounced.
  • For the first month in five, the municipal bond CEF (-8.24%) macro-group posted returns in the red, with all nine classifications in the group posting losses for March.

Download our Closed-End Funds FundMarket Insight Report: The Month in Closed-End Funds: March 2020 here.

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