QQQX - Preparing For Distribution Changes For CEFs With MDPs

• Some CEFs have managed distribution policies that are linked directly or indirectly to their NAVs, allowing investors to forecast changes in distributions with varying accuracy.
• Recent volatility has already caused some CEFs to lower their distributions as a result of the March drawdown, causing their discounts to widen relative to their sectors.
• Tactically, we like ERC and ERH here as they should see a rise in distributions in Q2, accompanied by a reversal of their recent discount underperformance.
• We would also tactically tilt away from RIV and OPP whose distributions will likely shift lower at the start of the year, assuming the funds retain the current MDP.

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