JFR - Weekly Closed-End Fund Roundup: Nuveen Senior Loan Funds Merger Complete (July 30 2023)
2023-08-10 10:32:01 ET
Summary
- 20 out of 22 CEF sectors positive on price.
- Nuveen senior loan funds merger is complete.
- The combined JFR boosted its distribution by 14%.
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 July 28th, 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, 20 out of 22 sectors were positive on price (up from 9 last week) and the average price return was +0.69% (up from -0.14% last week). The lead gainer was Asia Equity (+3.98%) while Commodities lagged (-0.87%).
Income Lab
12 out of 22 sectors were positive on NAV (up from 9 last week), while the average NAV return was -0.05% (down from -0.04% last week). The top sector by NAV was Asia Equity (+2.10%) while the weakest sector by NAV was Commodities (-1.96%).
Income Lab
The sector with the highest premium was Limited Duration (+0.04%), while the sector with the widest discount is Asia Equity (-14.18%). The average sector discount is -7.74% (up from -8.06% last week).
Income Lab
The sector with the highest premium/discount increase was Senior Loans (+1.25%), while Global Allocation (-0.37%) showed the lowest premium/discount decline. The average change in premium/discount was +0.33% (up from -0.11% last week).
Income Lab
The sector with the highest average 1-year z-score is MLPs (+0.75), while the sector with the lowest average 1-year z-score is Preferreds (-0.78). The average z-score is -0.26 (up from -0.44 last week).
Income Lab
The sectors with the highest yields are Senior Loans (+12.39%), Emerging Market Income (+11.45%), and Multisector Income (+10.57%). Discounts are included for comparison. The average sector yield is +7.98% (down from +8.05% 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 |
| PIMCO Strategic Income Fund |
| ( RCS ) |
| -6.53% |
| 11.17% |
| 26.64% |
| 1.2 |
| -3.86% |
| -2.46% |
| Gabelli Multimedia |
| ( GGT ) |
| -6.51% |
| 13.50% |
| 53.77% |
| 0.6 |
| -2.69% |
| 2.44% |
| PCM Fund |
| ( PCM ) |
| -5.75% |
| 10.23% |
| 39.38% |
| 1.2 |
| -3.40% |
| 0.87% |
| PIMCO Global StocksPLUS & Income |
| ( PGP ) |
| -4.21% |
| 11.14% |
| 0.13% |
| -0.9 |
| -3.26% |
| -0.45% |
| First Trust Spec Finance & Fincl Opp |
| ( FGB ) |
| -2.96% |
| 9.79% |
| -15.75% |
| -1.2 |
| -1.17% |
| -0.94% |
| abrdn Global Income Fund, Inc. |
| ( FCO ) |
| -2.86% |
| 13.55% |
| 49.76% |
| 2.5 |
| -2.82% |
| 0.00% |
| Eagle Point Income Co Inc |
| ( EIC ) |
| -2.56% |
| 14.38% |
| 3.43% |
| -1.2 |
| -1.91% |
| -1.88% |
| BrandywineGLOBAL – Global Inc Opp Fund |
| ( BWG ) |
| -2.46% |
| 11.81% |
| -15.14% |
| -1.2 |
| -3.33% |
| -1.28% |
| Liberty All-Star Equity |
| ( USA ) |
| -2.33% |
| 9.55% |
| 2.92% |
| 0.9 |
| -1.47% |
| -0.36% |
| Madison Covered Call & Eq Strat |
| ( MCN ) |
| -2.31% |
| 9.63% |
| 0.95% |
| -1.8 |
| -1.45% |
| 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 |
| Carlyle Credit Income Ord |
| ( CCIF ) |
| 16.00% |
| 8.42% |
| -4.44% |
| 0.5 |
| -0.88% |
| -1.69% |
| Gabelli Utility Trust |
| ( GUT ) |
| 4.40% |
| 8.53% |
| 114.33% |
| 1.8 |
| 0.86% |
| -3.84% |
| First Trust/abrdn Global Opp Inc |
| ( FAM ) |
| 4.20% |
| 11.14% |
| -6.44% |
| 1.6 |
| 5.29% |
| -1.77% |
| BlackRock Enhanced Government |
| ( EGF ) |
| 4.05% |
| 4.89% |
| -1.85% |
| 2.3 |
| 3.59% |
| -1.04% |
| PIMCO Corporate & Income Opportunity Fd |
| ( PTY ) |
| 3.06% |
| 9.74% |
| 35.30% |
| 3.0 |
| 2.59% |
| -3.81% |
| Nuveen AMT-Free Municipal Value Fund |
| ( NUW ) |
| 2.89% |
| 3.46% |
| -7.13% |
| 0.9 |
| 2.93% |
| -1.26% |
| PIMCO Corporate & Income Strgy |
| ( PCN ) |
| 2.85% |
| 9.87% |
| 23.58% |
| 2.2 |
| 2.63% |
| 0.00% |
| Saba Capital Income & Opportunities Fund |
| ( BRW ) |
| 2.60% |
| 12.83% |
| -7.43% |
| 0.8 |
| 1.79% |
| -0.27% |
| Oxford Lane Capital Corp |
| ( OXLC ) |
| 2.60% |
| 17.68% |
| 26.50% |
| 1.2 |
| 3.23% |
| -0.92% |
| Invesco Municipal Inc Opp I |
| ( OIA ) |
| 2.52% |
| 5.04% |
| 0.00% |
| 0.0 |
| 1.61% |
| -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.
June 22, 2023 | Neuberger Berman High Yield Strategies Fund Announces Preliminary Results of Rights Offering.
Upcoming corporate actions
These are from the past month. Any new news in the past week has a bolded date:
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 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:
July 17, 2023 | Vertical Capital Income Fund Announces Appointment of Carlyle as Investment Manager and Rebrand to Carlyle Credit Income Fund.
June 29, 2023 | Saba Capital Files Lawsuit Against 16 Closed-End Funds Over Control Share Provisions.
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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
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Commentary
The merger of Nuveen Senior Income Fund (NSL), Nuveen Floating Rate Income Opportunity Fund (JRO), Nuveen Short Duration Credit Opportunities Fund ( NSL ) into Nuveen Floating Rate Income Fund ( JFR ) was completed on July 31, 2023 . We discussed the merger in previous CEF Weekly Roundups here and here ( public link ).
The discounts of the funds remained close heading into the final week before the merger, so there was little arbitrage opportunity available. The day before the merger, the discounts of NSL, JRO, JSD and JFR were -13.37%, -12.54%, -12.98% and -12.69% respectively.
As discussed previously , none of these Nuveen senior loan funds were under attack by activists. Nevertheless, the merger could still be a prophylactic attempt by Nuveen to preemptively ward of activist activity.
The proxy documents indicate that the management fees of the combined fund would be estimated to be 1.21%, which is around 5-6 bps lower than the management fees for the individual funds. Although this is a benefit to investors, it is a relatively slim difference.
At the same time as the merger closing, JFR also declared a boost to its distribution of +14.1%. JFR currently yields 12.61% at market price, putting it among the higher-yielding funds among the senior loan peer group (CLO funds excluded).
Income Lab
We can also see from the table above that JFR is by far the largest of the senior loan funds at over $2B in assets, while the remaining funds all have under $1B in assets (the largest being HFRO at $930M).
For further details see:
Weekly Closed-End Fund Roundup: Nuveen Senior Loan Funds Merger Complete (July 30, 2023)