June 4, 2020

The Month in Closed-End Funds: May 2020

by Tom Roseen.

For the month, 93% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 85% of equity CEFs and 98% of fixed income CEFs chalking up returns in the plus column. For the first month in five, Lipper’s world equity CEFs macro-group (+5.22%) outpaced its two equity-based brethren: mixed-assets CEFs (+4.49%) and domestic equity CEFs (+4.20%). For the second month in a row, the Energy MLP CEFs classification (+8.75%) outperformed all other equity classifications, followed by Convertible Securities CEFs (+8.39%) and Developed Markets CEFs (+7.50%). Once again, Real Estate CEFs (+0.88%) was the relative laggard of the equity universe.

For the first month in five, world income CEFs moved to the top of the charts, posting a 5.55% return on average, followed by municipal bond CEFs (+4.77%) and domestic taxable fixed income CEFs (+4.51%). Investors remained more risk seeking during the month, pushing High Yield CEFs (Leveraged) (+5.66%) to the top of the domestic taxable fixed income leaderboard for the month, followed by High Yield CEFs (+4.85%) and Loan Participation CEFs (+4.73%).

For May, the median discount of all CEFs narrowed 26 bps to 9.11%—wider than the 12-month moving average median discount (7.12%). In this report, we highlight May 2020 CEF performance trends, premiums and discounts, and corporate actions and events.


  • For the second month in a row, equity CEFs on average posted positive returns, rising 4.44% on a NAV basis for May. Meanwhile, also for the second month running, fixed income CEFs witnessed returns in the black (+4.69%, their strongest one-month return since September 2009).
  • Only 15% of all CEFs traded at a premium to their NAV, with 17% of equity CEFs and 13% of fixed income CEFs trading in premium territory. The national municipal bond CEFs macro-classification witnessed the largest narrowing of discounts for the month among Lipper’s CEF macro-groups—105 basis points (bps) to 6.76%.
  • Real Estate CEFs (+0.88%) was the relative laggard in the equity CEF universe for the month.
  • Emerging Markets Hard Currency Debt CEFs (+10.33%, its strongest one-month return since April 1995) and Energy MLP CEFs (+8.75%) posted the strongest plus-side returns in the CEF universe.
  • For the first month in three, the municipal bond CEFs (+4.77%) macro-group posted returns in the black, with all nine classifications in the group posting plus-side returns for May.

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

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