- In the first quarter, closed-end fund discounts tightened by 261 bps from -6.3% to -3.7%. But in the month of April, we saw another 80 bps of closure.
- We think the muni CEF space looks relatively attractive compared to the taxable bond CEF categories.
- As such, we've been trimming many of our taxable bond CEF positions while increasing the exposure to munis. It's my contention that muni CEFs will eventually hit a premium.
- Look at funds that have wider discounts and higher yields as those securities are attracting the most amount of capital.
- RSF, ARDC, VCIF, NCZ and BWG fit that mold. We also like preferreds of CEFs for long-term income streams. NHF-A, OPP-A, XFLT-A, ACP-P, and OXLCP.
For further details see:
CEF Report May 2021: The Tight Get Tighter