2023-05-18 11:53:05 ET
Summary
- 6 out of 22 CEF sectors positive on price and 10 out of 22 sectors positive on NAV last week.
- XFLT boosts distribution by +16.44%.
- Distribution level highest since inception in 2017.
Author’s note: This article was released to CEF/ETF Income Laboratory members on May 10, 2023. Please check latest data before investing.
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 Friday, May 5th, 2023 .
JPMorgan releases a nice Weekly market Recap every week. The chart of the week shows that wage growth has been moderating since April 2022, which should allow the Fed to be less hawkish in their fight against inflation. As displayed in last week's chart of the week, FOMC members expect interest rates to peak in 2023 and begin falling in 2024.
This is a table of key index returns this week:
Weekly performance roundup
For CEFs, 6 out of 22 sectors were positive on price (down from 16 last week) and the average price return was -0.65% (down from +0.40% last week). The lead gainer was Commodities (+1.54%) while Preferreds lagged (-4.12%).
10 out of 22 sectors were positive on NAV (down from 14 last week), while the average NAV return was -0.44% (down from +0.03% last week). The top sector by NAV was Commodities (+2.07%) while the weakest sector by NAV was Preferreds (-4.32%).
The sector with the highest premium was Limited Duration (-0.32%), while the sector with the widest discount is Asia Equity (-17.45%). The average sector discount is -8.31% (down from -8.03% last week).
The sector with the highest premium/discount increase was New York Munis (+0.78%), while Global Allocation (-0.82%) showed the lowest premium/discount decline. The average change in premium/discount was -0.26% (down from +0.08% last week).
The sector with the highest average 1-year z-score is Commodities (+0.60), while the sector with the lowest average 1-year z-score is Asia Equity (-1.71). The average z-score is -0.77 (up from -0.61 last week).
The sectors with the highest yields are Senior Loans (+12.61%), Emerging Market Income (+11.74%), and Multisector Income (+10.82%). Discounts are included for comparison. The average sector yield is +8.26% (up from +8.20% 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 |
ArrowMark Financial Corp | ( BANX ) | -13.48% | 10.61% | -29.83% | -4.0 | -15.03% | -2.46% |
PIMCO Global StocksPLUS & Income | ( PGP ) | -5.40% | 11.23% | 0.55% | -1.0 | -0.67% | 2.44% |
Barings Participation Invs | ( MPV ) | -5.33% | 8.16% | -20.88% | -1.3 | -7.61% | 0.87% |
Eagle Capital Growth | ( GRF ) | -3.77% | 4.51% | -19.67% | -1.4 | -4.96% | -0.45% |
Invesco Municipal Inc Opp I | ( OIA ) | -3.53% | 5.09% | -2.04% | -0.7 | -3.03% | -0.94% |
Tekla World Healthcare Fund | ( THW ) | -3.51% | 9.99% | 7.35% | -1.0 | -2.50% | 0.00% |
BlackRock Enhanced Government | ( EGF ) | -3.36% | 4.92% | -4.85% | -0.3 | -2.50% | -1.88% |
EV Municipal Income 2028 Term Trust | ( ETX ) | -3.34% | 4.13% | -5.83% | -1.2 | -3.24% | -1.28% |
OFS Credit Company Inc | ( OCCI ) | -3.33% | 25.58% | -10.96% | -0.6 | -3.26% | -0.36% |
Virtus Stone Harbor Emerging Markets Inc | ( EDF ) | -3.25% | 17.18% | 3.96% | -0.4 | -0.71% | 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 |
RiverNorth Manage Dur Muni Inc Fd II Inc | ( RMMZ ) | 4.57% | 7.34% | -7.67% | 0.0 | 3.45% | -1.69% |
XAI Octagon FR & Alt Income Term Trust | ( XFLT ) | 4.23% | 15.29% | 5.00% | 0.6 | 2.77% | -3.84% |
Flaherty & Crumrine Preferred Income | ( PFD ) | 3.95% | 7.02% | -2.14% | -0.7 | -1.18% | -1.77% |
Western Asset Global High Income | ( EHI ) | 3.73% | 10.79% | 0.28% | 2.4 | 4.93% | -1.04% |
BNY Mellon Alcentra Gl Crd Inc 2024 Tgt | ( DCF ) | 3.54% | 7.64% | -0.76% | 2.0 | 3.56% | -3.81% |
NXG Cushing Midstream Energy Fund | ( SRV ) | 2.98% | 15.98% | -5.85% | 2.1 | 0.63% | -1.26% |
BlackRock Energy and Resources | ( BGR ) | 2.65% | 6.55% | -9.00% | 0.0 | -3.99% | 0.00% |
Cohen & Steers Tax-adv Prd Sec and Inc | ( PTA ) | 2.62% | 9.59% | -8.46% | -0.6 | -2.04% | -0.27% |
Nuveen NY Municipal Value | ( NNY ) | 2.58% | 3.87% | -3.98% | -1.0 | 3.09% | -0.92% |
PIMCO Dynamic Income Opportunities Fund | ( PDO ) | 2.56% | 11.69% | 0.54% | 0.2 | 3.14% | -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:
April 17, 2023 | Eaton Vance Closed-End Fund Merger Complete.
April 17, 2023 | Nuveen Municipal Closed-End Funds Announce Completion of Mergers.
April 10, 2023 | CBRE Global Real Estate Income Fund (IGR) Announces the Preliminary Results of Rights Offering.
April 3, 2023 | Nuveen Intermediate Duration Municipal Term Fund Announces Termination and Liquidation.
Upcoming corporate actions
These are from the past month. Any new news in the past week has a bolded date:
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:
April 14, 2023 | BlackRock Closed-End Fund Share Repurchase Program Update .
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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
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Commentary
1. XFLT boost
This raise is significant because it is the highest distribution level of XFLT since inception of the fund in 2017, meaning that it was also higher than its pre-COVID distribution level. If you recall, XFLT reduced its distribution in April 2020 from $0.073 to $0.06 (-17.8%) as result of turmoil in the credit markets. This was increased back to $0.073 (+21.67%) in October 2020 when markets recovered.
At the current $0.0850/share level, the NAV yield is 15.96%, with a market yield of 15.25%. The rising yield is due to XFLT's portfolio of mostly senior loans and CLO securities, which are floating rate.
Nick Ackerman predicted the distribution increase for XFLT earlier this year for our members, great call! See: XFLT: Coverage Jumps, Fully Covered 13.46% Distribution Yield (Portfolio Holding)
For further details see:
Weekly Closed-End Fund Roundup: XFLT Distribution Boost (May 7, 2023)