October 4, 2017

The Month in Closed-End Funds: September 2017

by Tom Roseen

Despite a rough patch in mid-September, 61% of all CEFs posted NAV-based returns in the black, with 81% of equity CEFs and 45% of fixed income CEFs chalking up returns in the plus column. As a result of strengthening crude oil prices and other select commodities prices during the month, the Natural Resources CEFs classification (+4.95%) jumped to the top of the equity charts for the first month in 41. And for the tenth month in a row domestic taxable bond CEFs (+0.28%) posted a plus-side return on average, with High Yield CEFs (+0.78%) rising to the top of the charts. In this report we highlight September 2017 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the tenth month in eleven equity closed-end funds (CEFs) witnessed a plus-side return on average, rising 1.27% on a net-asset-value (NAV) basis for September, while for the first month in three their fixed income CEF counterparts posted a return in the red, declining 0.02%.
  • For September 23% of all CEFs traded at a premium to their NAV, with 22% of equity CEFs and 24% of fixed income CEFs trading in premium territory. Thomson Reuters Lipper’s domestic equity CEFs macro-group witnessed the largest narrowing of discounts for the month—120 basis points (bps) to 3.07%.
  • Natural Resources CEFs (+4.95%) and Core CEFs (+3.19%) posted the strongest returns in the equity universe, propping up the domestic equity CEFs (+1.43%) macro-group.
  • A relatively strong return from Emerging Markets Debt CEFs (+0.71%) helped keep the world bond CEFs macro-group at the head of the class.
  • Breaking their winning streak, all Lipper municipal debt CEF classifications posted returns in the red, with California Municipal Debt CEFs (-0.59%) being the group laggard.

Download our Closed-End Funds FundMarket Insight Report: The Month in Closed-End Funds: September 2017 here.

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