- Discounts widened a bit but remain very tight relative to historical comparisons going back to 1996. Munis are now in line with taxable avg. premiums.
- At this time, a counter-cyclical approach is warranted. I have been advocating rotating from leveraged, junkier, and discount susceptible structures to open-end funds.
- Moving up quality is warranted at this point, but you will be reducing your income substantially by doing so.
- We run through the scenario that is likely to drive discounts, on average, wider.
- Are there any opportunities out there? We find a few but they are scarce today and the upside opportunity is relatively small in comparison to other time periods.
For further details see:
CEF Report September 2021 | A Broken Record