ETV - Eaton Vance Option CEFs Looking Better

2024-02-08 13:59:42 ET

Summary

• It's taken well over a year, but I'm starting to sense that the Eaton Vance equity CEFs are finally turning the corner at market price support and appreciation.
• Now don't get me wrong. Their NAV performances have been stellar and in fact, the top four funds outperforming at NAV so far this year are all from Eaton Vance.
• But for a combination of reasons, mostly due to rising interest rates and institutional shareholders reducing CEF exposure, almost all CEFs have seen valuations plummet since the first rate raise in March of 2022.
• But with expectations that the next move by the Federal Reserve will be a cut in rates, we may be seeing the start of institutional investors stepping back into CEFs.  It didn't happen in January, but February at least, is looking better.
• And frankly, no CEFs deserve more institutional interest right now than the Eaton Vance equity CEFs.  And a big reason for that may be due to the expectation that Eaton Vance will be raising distributions on their funds soon.

Once again, I'm going to tell you that your best choices among equity CEFs are with the Eaton Vance funds. These are, without a doubt, the largest, most popular and most successful equity CEFs in the markets today, even if they have all lost valuation at market price over the last year and a half.

But that's not Eaton Vance's fault, since once again, their funds are leading all of the approximately 100 equity CEFs I follow. Whose fault is that? Well, that's the shareholders fault for selling the funds for whatever reason, even while their NAVs were outperforming....

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