2023-08-30 08:12:50 ET
Summary
- 1 out of 22 CEF sectors positive on price and 3 out of 22 sectors positive on NAV.
- CEN merger into an open-ended fund has been approved by shareholders.
- CEN investors can switch to a more discounted MLP/infrastructure CEF.
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 18th, 2023 .
JPMorgan releases a nice Weekly market Recap every week. These are the key index levels this week for equities:
Weekly performance roundup
For CEFs, 0 out of 22 sectors were positive on price (down from 13 last week) and the average price return was -2.30% (down from -1.22% last week). The lead gainer was MLPs (-0.92%) while Real Estate lagged (-4.27%).
0 out of 22 sectors were positive on NAV (down from 13 last week), while the average NAV return was -0.07% (up from -1.26% last week). The top sector by NAV was Senior Loans (-0.24%) while the weakest sector by NAV was Real Estate (-4.14%).
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 -1.90% (up from -7.14% last week).
The sector with the highest premium/discount increase was New York Munis (+0.62%), while Emerging Market Income (-1.85%) showed the lowest premium/discount decline. The average change in premium/discount was -0.44% (down from +0.21% last week).
The sector with the highest average 1-year z-score is MLPs (+1.27), while the sector with the lowest average 1-year z-score is Taxable Munis (-1.04). The average z-score is -0.14 (down from +0.01 last week).
The sectors with the highest yields are Senior Loans (+12.73%), Emerging Market Income (+12.00%), and Real Estate (+10.88%). Discounts are included for comparison. The average sector yield is +8.37% (up from +8.14% 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 |
PCM Fund | ( PCM ) | -8.56% | 10.63% | 37.65% | 0.8 | -6.71% | -2.46% |
Cornerstone Total Return Fund | ( CRF ) | -5.94% | 18.09% | 21.00% | 0.2 | -8.25% | 2.44% |
Stone Harbor Emerging Markets Income | ( EDF ) | -5.68% | 16.18% | 6.97% | 0.3 | -7.48% | 0.87% |
Credit Suisse Asset Management Income | ( CIK ) | -5.56% | 9.51% | 0.00% | 0.5 | -6.43% | -0.45% |
Stone Harbor Emerging Markets Total Income | ( EDI ) | -5.55% | 15.91% | 6.45% | 0.6 | -7.69% | -0.94% |
Cornerstone Strategic Value | ( CLM ) | -4.97% | 18.26% | 20.45% | 0.1 | -7.56% | 0.00% |
DoubleLine Yield Opportunities Fund | ( DLY ) | -4.67% | 9.78% | -5.98% | 0.9 | -5.67% | -1.88% |
Oxford Lane Capital | ( OXLC ) | -4.27% | 18.79% | 9.46% | -0.3 | -5.02% | -1.28% |
Eagle Point Income Company | ( EIC ) | -4.00% | 13.78% | 4.82% | -0.9 | -0.92% | -0.36% |
Cushing MLP & Infrastructure Total Return | ( SRV ) | -3.89% | 13.40% | 4.62% | 1.8 | -6.63% | 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 |
abrdn Global Income Fund, Inc. | ( FCO ) | 8.77% | 14.00% | 49.25% | 2.1 | 4.17% | -1.69% |
Gabelli Utility Trust | ( GUT ) | 5.66% | 8.84% | 123.36% | 2.6 | -2.23% | -3.84% |
OFS Credit Company, Inc. | ( OCCI ) | 4.30% | 27.16% | 5.72% | 1.3 | 4.25% | -1.77% |
Destra Multi-Alternative | ( DMA ) | 3.95% | 0.96% | -47.81% | -0.9 | 7.25% | -1.04% |
The Central and Eastern Europe Fund | ( CEE ) | 3.75% | 2.60% | 7.23% | -0.8 | -0.11% | -3.81% |
MFS Municipal Income | ( MFM ) | 2.90% | 4.07% | -10.57% | 1.5 | 1.57% | -1.26% |
MainStay DefinedTerm Muni Opp | ( MMD ) | 2.88% | 4.96% | 1.26% | 0.7 | 1.62% | 0.00% |
Nuveen Municipal Income | ( NMI ) | 2.84% | 4.00% | -2.48% | 0.9 | 1.83% | -0.27% |
DNP Select Income | ( DNP ) | 2.75% | 7.76% | 25.95% | 0.6 | -0.30% | -0.92% |
Nuveen MO Premium Inc Muni Fund | ( NOM ) | 2.74% | 3.06% | -11.67% | -0.6 | 1.83% | -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:
July 31, 2023 | Nuveen Floating Rate Income Fund Announces Completion of Mergers and Distribution Increase.
Upcoming corporate actions
These are from the past month. Any new news in the past week has a bolded date:
August 16, 2023 | Center Coast Brookfield MLP & Energy Infrastructure Fund Announces Shareholder Approval of its Reorganization into Center Coast Brookfield Midstream Focus Fund .
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 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
Boosters
Commentary
1. CEN merger approved
The merger of Center Coast Brookfield MLP & Energy Infrastructure Fund ( CEN ), into the open-ended Center Coast Brookfield Midstream Focus Fund (MUTF: CCCAX ) (MUTF: CCCNX ) (the “Focus Fund”). has just been approved by the fund shareholders. We discussed this when the merger proposal was first announced in a previous CEF Weekly Roundup ( public link ).
The market seemed to have already expected a positive outcome to the vote, as the discount had already narrowed to only a few percentage even before the voting was announced. On the day of the announcement, the discount narrowed only mildly, from -3.11% to -1.37%. Remember, as the merger will be a NAV-for-NAV exchange, this will cause CEN's discount to be eliminated since open-ended mutual funds always trade at their NAV.
The reason why the market probably thought that the merger would go through was because Saba, which owned over 20% of CEN, had agreed to vote with management to support the merger. This merger can be chalked up as another Saba victory, which filed its first 13D filing (indicating active intent) in CEN all the way back on October 29, 2021 .
The merger is slated to take place on October 6, 2023 . At a -1.40% discount, there's little arbitrage potential remaining. Hence, holders of CEN should cash out now and rotate their funds into more discounted MLP/infrastructure CEFs, such as Tortoise Midstream Energy Fund ( NTG ) (-15.22% discount) or First Trust MLP and Energy Income Fund ( FEI ) (-13.05% discount), which are current holdings of our Tactical Income-100 portfolio.
For further details see:
Weekly Closed-End Fund Roundup: CEN Merger Approved (August 20, 2023)