SBI - Weekly Closed-End Fund Roundup: MNP And MMU To Merge (August 13 2023)
2023-08-24 08:44:32 ET
Summary
- 13 out of 22 CEF sectors positive on price and 13 out of 22 sectors positive on NAV.
- MNP and MMU to merge.
- Current arbitrage potential is slim.
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 August 11th, 2023 .
JPMorgan releases a nice Weekly Market Recap every week. These are the key index levels this week for equities:
JPMorgan
Weekly performance roundup
For CEFs, 13 out of 22 sectors were positive on price (up from 13 last week) and the average price return was -1.22% (down from -1.22% last week). The lead gainer was MLPs (+2.98%) while Asia Equity lagged (-2.32%).
Income Lab
13 out of 22 sectors were positive on NAV (up from 2 last week), while the average NAV return was -0.07% (down from -1.26% last week). The top sector by NAV was MLPs (+0.97%) while the weakest sector by NAV was Commodities (-1.47%).
Income Lab
The sector with the highest premium was Limited Duration (+1.85%), while the sector with the widest discount is Asia Equity (-14.56%). The average sector discount is -7.14% (up from -7.50% last week).
Income Lab
The sector with the highest premium/discount increase was Convertibles (+1.46%), while New York Munis (-1.31%) showed the lowest premium/discount decline. The average change in premium/discount was +0.21% (down from +0.35% last week).
Income Lab
The sector with the highest average 1-year z-score is MLPs (+1.79), while the sector with the lowest average 1-year z-score is New York Munis (-0.92). The average z-score is +0.01 (up from -0.15 last week).
Income Lab
The sectors with the highest yields are Senior Loans (+12.56%), Emerging Market Income (+10.83%), and Real Estate (+10.53%). Discounts are included for comparison. The average sector yield is +8.14% (up from +8.07% last week).
Income Lab
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 |
| Oxford Lane Capital |
| (OXLC) |
| -15.81% |
| 17.84% |
| 13.74% |
| 0.1 |
| -4.78% |
| -2.46% |
| abrdn Global Income Fund, Inc. |
| (FCO) |
| -4.00% |
| 14.58% |
| 40.49% |
| 1.4 |
| -2.54% |
| 2.44% |
| Nuveen NY Select Tax-Free Income |
| (NXN) |
| -3.57% |
| 4.15% |
| -5.80% |
| 0.0 |
| -3.12% |
| 0.87% |
| MFS Municipal Income |
| (MFM) |
| -3.31% |
| 4.13% |
| -13.46% |
| -0.3 |
| -2.87% |
| -0.45% |
| Taiwan Fund |
| (TWN) |
| -3.12% |
| 1.57% |
| -21.05% |
| -1.7 |
| -3.42% |
| -0.94% |
| Nuveen Preferred & Income Term Fund |
| (JPI) |
| -3.02% |
| 6.78% |
| -5.76% |
| -1.0 |
| -3.02% |
| 0.00% |
| John Hancock Premium Dividend Fund |
| (PDT) |
| -2.98% |
| 9.30% |
| -8.66% |
| -2.4 |
| -2.92% |
| -1.88% |
| First Trust Energy Income And Growth |
| (FEN) |
| -2.86% |
| 8.47% |
| -9.79% |
| -0.3 |
| 0.85% |
| -1.28% |
| BlackRock Income |
| (BKT) |
| -2.77% |
| 8.95% |
| -5.52% |
| -0.1 |
| -2.07% |
| -0.36% |
| Putnam Managed Muni Income |
| (PMM) |
| -2.71% |
| 4.96% |
| -10.70% |
| -1.4 |
| -2.04% |
| 1.49% |
Income Lab
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 |
| Barings Participation Investors |
| (MPV) |
| 4.55% |
| 8.17% |
| -8.31% |
| 1.8 |
| 3.63% |
| -1.69% |
| Gabelli Utility Trust |
| (GUT) |
| 3.93% |
| 8.64% |
| 117.71% |
| 2.0 |
| 0.80% |
| -3.84% |
| Eagle Point Income Company |
| (EIC) |
| 3.86% |
| 13.66% |
| 8.83% |
| -0.1 |
| 4.54% |
| -1.77% |
| Nuveen Global High Income Fund |
| (JGH) |
| 3.76% |
| 10.42% |
| -7.13% |
| 1.5 |
| 3.20% |
| -1.04% |
| DoubleLine Yield Opportunities Fund |
| (DLY) |
| 3.55% |
| 9.23% |
| -1.30% |
| 2.9 |
| 4.19% |
| -3.81% |
| ClearBridge MLP and Midstream TR |
| (CTR) |
| 3.53% |
| 8.14% |
| -9.69% |
| 4.3 |
| 4.53% |
| -1.26% |
| ClearBridge MLP and Midstream |
| (CEM) |
| 3.53% |
| 8.07% |
| -10.76% |
| 3.8 |
| 4.81% |
| 0.00% |
| BlackRock Enhanced Capital and Income |
| (CII) |
| 3.17% |
| 6.23% |
| -0.78% |
| 1.4 |
| 3.12% |
| -0.27% |
| Western Asset Premier Bond |
| (WEA) |
| 3.09% |
| 7.25% |
| -2.50% |
| 1.9 |
| 1.20% |
| -0.92% |
| Neuberger Berman Next Generation Connectivity |
| (NBXG) |
| 3.03% |
| 11.03% |
| -15.20% |
| 2.6 |
| 1.40% |
| -1.02% |
Income Lab
New!
From our screener, here are the CEFs with the highest yields, widest discounts, and lowest 1-year z-scores:
Income Lab
From our screener, here are the CEFs with the best 1-year performance, highest premiums, and highest 1-year z-scores:
Income Lab
Recent corporate actions
These are from the past month. Any new news in the past week has a bolded date:
July 31, 2023 | Nuveen Floating Rate Income Fund Announces Completion of Mergers and Distribution Increase. [ Initial merger proposal ] [ Shareholder approval announcement ]
Upcoming corporate actions
These are from the past month. Any new news in the past week has a bolded date:
August 14, 2023 | Western Asset Managed Municipals Fund Inc., Western Asset Municipal Partners Fund Inc., Western Asset Intermediate Muni Fund Inc. Announce Results of Stockholder Votes at Special Meeting of Stockholders Relating to Proposed Mergers.
July 10, 2023 | Virtus Stone Harbor Emerging Markets Total Income Fund Announces Distributions; Provides Update on Pending Merger.
June 20, 2023 | Tekla Capital Management LLC Announces Proposed Transaction.
April 24, 2023 | Kayne Anderson Energy Infrastructure Fund and Kayne Anderson NextGen Energy & Infrastructure Announce Updated Terms for Proposed Merger. 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 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:
July 17, 2023 | Vertical Capital Income Fund Announces Appointment of Carlyle as Investment Manager and Rebrand to Carlyle Credit Income Fund.
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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
Income Lab
Boosters
Income Lab
Commentary
1. MNP and MMU to merge
We have consolidation in some Western Asset muni CEFs. Western Asset Municipal Partners Fund ( MNP ) shareholders voted to approve the merger of MNP with and into Western Asset Managed Municipals Fund ( MMU ). However, the merger of Western Asset Intermediate Muni Fund ( SBI ) into MMU did not receive sufficient votes, hence SBI would continue as a standalone company. The merger is expected to close mid-to-late October 2023, subject to all regulatory requirements and customary closing conditions being satisfied.
Since this is NAV-for-NAV exchange, investors would prefer to be in the cheapest of the merging funds prior to the merger (tax issues not considered). Right now, MMU and MNP are at nearly the same discount, so no arbitrage potential exists.
Income Lab
The combined fund of MMU and MNP would have around $600 million in AUM. SBI remains as a standalone fund with $124 million in AUM as of the time of writing.
For further details see:
Weekly Closed-End Fund Roundup: MNP And MMU To Merge (August 13, 2023)