WMB - FEN: Impending ETF Conversion Makes This Fund A Good Short-Term Play
2024-03-28 13:08:36 ET
Summary
- First Trust Energy Income and Growth Fund offers investors a way to add midstream partnerships to retirement accounts without tax complications.
- The fund has historically performed well and did not decline as much as other midstream funds during the COVID-19 pandemic.
- However, the fund's current yield of 7.43% is lower than some other options in the space.
- The fund fully covered its distributions during the most recent fiscal year and currently trades at a small discount on net asset value.
- The fund is converting into an ETF within the next month, which will erase the discount and should hand investors an easy capital gain.
The First Trust Energy Income and Growth Fund ( FEN ) is a closed-end fund, or CEF, that investors can use in order to add a number of midstream partnerships to their retirement accounts without the tax hassles that can sometimes accompany that. The fund has also been a historically good performer, as it did not decline nearly as much as some other midstream funds back during the COVID-19 pandemic and ensuing crisis in the energy industry.
However, FEN's current 7.43% yield is not as good as some other options in the space. We can see that here:
| Fund Name |
| Morningstar Classification |
| Current Yield |
| First Trust Energy Income and Growth Fund |
| Equity-MLP |
| 7.43% |
| Kayne Anderson Energy Infrastructure Fund ( KYN ) |
| Equity-MLP |
| 8.84% |
| Neuberger Berman Energy Infrastructure and Income Fund Inc ( NML ) |
| Equity-MLP |
| 9.68% |
| NXG Cushing Midstream Energy Fund ( SRV ) |
| Equity-MLP |
| 13.24% |
| Tortoise Energy Infrastructure Corporation ( TYG ) |
| Equity-MLP |
| 9.37% |
| ClearBridge MLP and Midstream Fund Inc. ( CEM ) |
| Equity-MLP |
| 6.82% |