January 7, 2021

The Month in Closed-End Funds: December 2020

by Tom Roseen.

For the month, 98% of all CEFs posted net asset value (NAV)-based returns in the black, with 98% of equity closed-end funds (CEFs) and 98% of fixed income CEFs chalking up returns in the plus column. For the second month running, Lipper’s world equity CEFs macro-group (+5.68%) outpaced its two equity-based brethren: mixed-assets CEFs (+3.68%) and domestic equity CEFs (+3.20%). The Emerging Markets CEFs classification (+6.61%) for the first month in six outperformed all other equity classifications, followed by Convertible Securities CEFs (+6.21%) and Developed Markets CEFs (+5.61%). Once again, Real Estate CEFs (+1.42%) posted the weakest returns in the equity universe.

For the second month in a row, world income CEFs remained at the top of the charts, posting a 3.44% return on average, followed by domestic taxable fixed income CEFs (+2.05%) and municipal bond CEFs (+1.44%). Fixed income investors were generally more risk seeking and in search of yield during the month, pushing General Bond CEFs (+2.20%) to the top of the domestic taxable fixed income leaderboard for the second month in three, followed by High Yield CEFs (Leveraged) (+2.13%) and Loan Participation CEFs (+2.02%).

For December, the median discount of all CEFs narrowed 50 basis points (bps) to 6.91%—narrower than the 12-month moving average median discount (8.47%). In this report, we highlight November 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 3.78% on a NAV basis for December, while for the ninth month running, fixed income CEFs witnessed returns in the black (+1.89%).
  • Eighteen percent of all CEFs traded at a premium to their NAV, with 17% of equity CEFs and 19% of fixed income CEFs trading in premium territory. The world income CEFs macro-classification witnessed the largest narrowing of discounts for the month among Lipper’s CEF macro-groups—117 bps to 5.15%.
  • Emerging Markets Funds (+6.61%) posted the strongest one-month returns of the equity classifications in the CEF universe for December.
  • For the second consecutive month, the world income CEFs (+3.44%) macro-group posted the strongest plus-side returns in the fixed income CEF universe for December.
  • The municipal bond CEF macro-group (+1.44%) posted plus-side returns for the second month in a row, with all nine classifications posting returns in the black.

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

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