CEF Weekly Review: CLO CEFs' NAVs Take It On The Chin In March

2025-04-26 22:36:53 ET

Summary

• We review the CEF market valuation and performance through the third week of April and highlight recent market action.
• Nearly all CEF sectors finished in the green this week, though month-to-date performance remains underwater.
• The median CEF sector discount has bounced off the trough, trading near the longer-term historical average, recovering close to half its April drawdown.
• CLO CEFs reported March NAVs with an average drop of around 6%; April NAVs are expected to be 3-5% lower due to further credit spread widening.
• We rotated our allocation from PDCC to ECC, seeing value in CCIF and EIC; market volatility has fueled significant alpha from relative value moves.

Welcome to another installment of our CEF Market Weekly Review, where we discuss closed-end fund ("CEF") market activity from both the bottom-up – highlighting individual fund news and events – as well as the top-down – providing an overview of the broader market. We also try to provide some historical context as well as the relevant themes that look to be driving markets or that investors ought to be mindful of....

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