DCF - Weekly Closed-End Fund Roundup: BlackRock Senior Loan Boosts DCF Cuts (June 4 2023)
2023-06-14 06:50:21 ET
Summary
- 22 out of 22 CEF sectors positive on price and 21 out of 22 sectors positive on NAV last week.
- BlackRock senior loan CEFs boost distribution.
- DCF cuts its distribution.
Author’s note: This article was released to CEF/ETF Income Laboratory members on June 6, 2023. Please check latest data before investing.
The Weekly Closed-End Fund Roundup will be put out at the start of each week to summarize recent price movements in closed-end fund [CEF] sectors in the last week, as well as to highlight recently concluded or upcoming corporate actions on CEFs, such as tender offers. Data is taken from the close of Sunday June 2nd, 2023 .
JPMorgan releases a nice Weekly Market Recap every week. These are the key index levels this week for equities:
The resolution of the debt ceiling crisis provided a tailwind for risk assets, including CEFs.
Weekly performance roundup
For CEFs, 22 out of 22 sectors were positive on price (up from 1 last week) and the average price return was +1.71% (up from -1.21% last week). The lead gainer was Real Estate (+3.81%) while Taxable Munis lagged (+0.15%).
21 out of 22 sectors were positive on NAV (up from 2 last week), while the average NAV return was +1.04% (down from -0.83% last week). The top sector by NAV was Real Estate (+2.78%) while the weakest sector by NAV was Asia Equity (-0.15%).
The sector with the highest premium was Commodities (-1.59%), while the sector with the widest discount is MLPs (-15.10%). The average sector discount is -8.66% (up from -8.94% last week).
The sector with the highest premium/discount increase was Multisector Income (+1.38%), while Taxable Munis (-1.12%) showed the lowest premium/discount decline. The average change in premium/discount was +0.29% (up from -0.45% last week).
The sector with the highest average 1-year z-score is Commodities (+1.17), while the sector with the lowest average 1-year z-score is Taxable Munis (-1.40). The average z-score is -0.68 (up from -0.80 last week).
The sectors with the highest yields are Senior Loans (+12.48%), Emerging Market Income (+12.34%), and Real Estate (+10.79%). Discounts are included for comparison. The average sector yield is +8.29% (down from +8.47% last week).
Individual CEFs that have undergone a significant decrease in premium/discount value over the past week, coupled optionally with an increasing NAV trend, a negative z-score, and/or are trading at a discount, are potential buy candidates.
| Fund |
| Ticker |
| P/D decrease |
| Yield |
| P/D |
| z-score |
| Price change |
| NAV change |
| Ecofin Sustainable and Social Impact |
| ( TEAF ) |
| -3.97% |
| 8.64% |
| -20.78% |
| -1.7 |
| -3.33% |
| -2.46% |
| BlackRock Taxable Municipal Bond Trust |
| ( BBN ) |
| -3.09% |
| 6.78% |
| -7.89% |
| -2.2 |
| -1.73% |
| 2.44% |
| RENN Fund ord |
| ( RCG ) |
| -2.72% |
| % |
| -19.46% |
| -1.9 |
| -3.80% |
| 0.87% |
| Highland Global Allocation Fund |
| ( HGLB ) |
| -2.64% |
| 11.86% |
| -23.63% |
| -1.5 |
| -2.75% |
| -0.45% |
| Nuveen NASDAQ 100 Dynamic Overwrite |
| ( QQQX ) |
| -2.44% |
| 6.74% |
| 3.41% |
| -0.5 |
| -1.27% |
| -0.94% |
| Foxby Corp. |
| ( OTCPK:FXBY ) |
| -2.42% |
| 1.75% |
| -38.22% |
| -2.1 |
| -13.04% |
| 0.00% |
| BlackRock VA Municipal Bond |
| ( BHV ) |
| -1.93% |
| 3.03% |
| -15.12% |
| -1.4 |
| 0.29% |
| -1.88% |
| PIMCO NY Municipal Income |
| ( PNF ) |
| -1.87% |
| 4.69% |
| -3.38% |
| -1.1 |
| 0.35% |
| -1.28% |
| Morgan Stanley Emerging Markets Debt |
| ( MSD ) |
| -1.70% |
| 9.77% |
| -14.11% |
| -0.9 |
| -0.77% |
| -0.36% |
| PIMCO CA Municipal Income II |
| ( PCK ) |
| -1.59% |
| 4.43% |
| -11.13% |
| -1.6 |
| 0.69% |
| 1.49% |
Conversely, individual CEFs that have undergone a significant increase in premium/discount value in the past week, coupled optionally with a decreasing NAV trend, a positive z-score, and/or are trading at a premium, are potential sell candidates.
| Fund |
| Ticker |
| P/D increase |
| Yield |
| P/D |
| z-score |
| Price change |
| NAV change |
| BlackRock Energy and Resources |
| ( BGR ) |
| 4.48% |
| 6.57% |
| -8.26% |
| 2.7 |
| 3.54% |
| -1.69% |
| Invesco High Income 2024 Target Term |
| ( IHTA ) |
| 4.08% |
| 5.47% |
| -5.97% |
| -0.4 |
| 4.93% |
| -3.84% |
| ASA Gold and Precious Metals Limited |
| ( ASA ) |
| 4.01% |
| 0.13% |
| -10.54% |
| 2.8 |
| 3.34% |
| -1.77% |
| Gabelli Global Utility & Income |
| ( GLU ) |
| 4.00% |
| 8.57% |
| -8.55% |
| -0.4 |
| 5.66% |
| -1.04% |
| Credit Suisse Asset Mgmt Income |
| ( CIK ) |
| 3.96% |
| 9.68% |
| -1.06% |
| 0.9 |
| 5.28% |
| -3.81% |
| Nuveen Dynamic Municipal Opportunities |
| ( NDMO ) |
| 3.49% |
| 7.00% |
| -2.83% |
| 0.2 |
| 5.25% |
| -1.26% |
| Gabelli Multimedia |
| ( GGT ) |
| 3.40% |
| 14.62% |
| 52.26% |
| 0.8 |
| 1.35% |
| 0.00% |
| XAI Octagon FR & Alt Income Term Trust |
| ( XFLT ) |
| 3.39% |
| 15.45% |
| 6.77% |
| 1.3 |
| 3.13% |
| -0.27% |
| Calamos Dynamic Convertible and Income |
| ( CCD ) |
| 3.30% |
| 9.82% |
| 22.22% |
| 3.2 |
| 5.07% |
| -0.92% |
| PIMCO Income Strategy II |
| ( PFN ) |
| 3.27% |
| 11.97% |
| 4.36% |
| 0.4 |
| 4.42% |
| -1.02% |
New!
From our screener, here are the CEFs with the highest yields, widest discounts, and lowest 1-year z-scores:
From our screener, here are the CEFs with the best 1-year performance, highest premiums, and highest 1-year z-scores:
Recent corporate actions
These are from the past month. Any new news in the past week has a bolded date:
April 17, 2023 | Eaton Vance Closed-End Fund Merger Complete.
April 17, 2023 | Nuveen Municipal Closed-End Funds Announce Completion of Mergers.
Upcoming corporate actions
These are from the past month. Any new news in the past week has a bolded date:
May 11, 2023 | Neuberger Berman High Yield Strategies Fund Announces Rights Offering and Summary of Terms.
April 13, 2023 | Nuveen Preferred Closed-End Funds Announce Proposed Mergers.
March 30, 2023 | Center Coast Brookfield MLP & Energy Infrastructure Fund Announces Planned Reorganization .
March 27, 2023 | Kayne Anderson Energy Infrastructure Fund and Kayne Anderson NextGen Energy & Infrastructure Announce Proposed Merger.
March 22, 2023 | Board of First Trust Dynamic Europe Equity Income Fund Approves Conversion into an ETF .
Recent activist or other CEF news
These are from the past month. Any new news in the past week has a bolded date:
------------------------------------
Distribution changes announced this month
These are sorted in ascending order of distribution change percentage. Funds with distribution changes announced this month are included. Any distribution declarations made this week are in bold. I've also added monthly/quarterly information as well as yield, coverage (after the boost/cut), discount and 1-year z-score information. I've separated the funds into two sub-categories, cutters and boosters.
Cutters
Boosters
-----------------------------------
Commentary
Not much to talk about this week, except that the start of the month brings news of distribution changes from some of the major fund families. We see that the BlackRock senior loan funds ( FRA ) ( BGT ) ( DSU ) have boosted by +4.9% this month, as has a First Trust senior loan fund ( FCT ) by +5.4% as well as an Eaton Vance floater ( EFR ) with a smaller +1.9% boost.
Nick covered the FRA boost in a recent article to our members here: FRA: Another Distribution Increase (Nick Ackerman)
BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund ( DCF ), a previous holding in our Tactical Income-100 portfolio, reduced its distribution by -30%, from $0.05 to $0.035 per month. The current NAV yield is a modest 5.31%, with 136% nominal coverage. I suspect that DCF will continue to gradually lower its distribution next year as it heads towards its targeted liquidated date on December 1, 2024.
Strategy Statement
Our goal at the CEF/ETF Income Laboratory is to provide consistent income with enhanced total returns . We achieve this by:
- (1) Identifying the most profitable CEF and ETF opportunities.
- (2) Avoiding mismanaged or overpriced funds that can sink your portfolio.
- (3) Employing our unique CEF rotation strategy to " double compound " your income.
It's the combination of these factors that has allowed our Income Generator portfolio to massively outperform our fund-of-CEFs benchmark ETF ( YYY ) whilst providing growing income, too (approx. 10% CAGR).
Income Lab
Remember, it's really easy to put together a high-yielding CEF portfolio, but to do so profitably is another matter!
For further details see:
Weekly Closed-End Fund Roundup: BlackRock Senior Loan Boosts, DCF Cuts (June 4, 2023)