NUW - Key Decision Factors For CEF Allocation In Today's Market

2024-02-08 02:29:37 ET

Summary

• The price action in the CEF market over the last few months has been fast and furious.
• We revisit the key decision factors of income investing that can streamline and organize the allocation process as applied to CEFs.
• We focus on three macro and three micro factors for CEF allocation.
• This approach currently favors shorter-duration higher-quality funds with modest or hedged-out leverage in sectors that are historically cheap.

The price action in the CEF market over the last few months has been fast and furious. The apparent Fed pivot and the associated drop in both credit spreads and interest rates has renewed investor confidence in the market, pushing prices and NAVs higher. Large moves can be disorienting for allocation so in this article we go back to basics. Specifically, we revisit the key decision factors of income investing that can streamline and organize the allocation process as applied to CEFs....

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