February 6, 2018

The Month in Closed-End Funds: January 2018

by Tom Roseen

For the month of January 58% of all closed-end funds (CEFs) posted NAV-based returns in the black, with 78% of equity CEFs and 44% of fixed income CEFs chalking up returns in the plus column. A continued synchronization in global growth and rallies in select commodities helped push related CEF classifications to the top of the charts for January. Emerging Markets CEFs (+7.19%) jumped to the top of the equity charts for the first month in five. For the fourteenth month in a row domestic taxable bond CEFs (+0.73%) posted a plus-side return on average but underperformed their world income CEFs (+1.45%) cohort. Muni CEFs declined 1.40% for the month. In this report we highlight January 2018 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the fifth month in a row equity CEFs witnessed a plus-side return on average, rising 2.88% on a NAV basis for January, while for the second month in three their fixed income CEF counterparts posted a negative return, losing 0.27% on average for the month.
  • For January only 13% of all CEFs traded at a premium to their NAV, with 16% of equity CEFs and 11% of fixed income CEFs trading in premium territory. World equity CEFs witnessed the only narrowing of discounts for the month among Thomson Reuters Lipper’s macro-groups—34 basis points (bps) to 8.86%.
  • Emerging Markets CEFs (+7.19%) and Energy MLP CEFs (+6.74%) posted the strongest classification returns in the equity universe.
  • For the first month in three world equity CEFs (+5.27%) outpaced their domestic equity CEF (+2.47%) and mixed-asset CEF (+1.20%) macro-group counterparts.
  • None of the municipal debt CEF classifications posted returns in the black for January, with Intermediate Municipal Debt CEFs (-0.96%) and High Yield Municipal Debt CEFs (-0.97%) mitigating losses better than the other classifications in the group.

Download our Closed-End Funds FundMarket Insight Report: The Month in Closed-End Funds: January 2018 here.

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