April 4, 2018

The Month in Closed-End Funds: March 2018

by Tom Roseen.

For the month only 58% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 35% of equity CEFs and 75% of fixed income CEFs chalking up returns in the plus column. A move toward interest rate-sensitive assets helped related CEF classifications outperform the other classifications for March. Real Estate CEFs (+1.51%) jumped to the top of the equity charts for the first month since December 2015, followed by Utility CEFs (+1.47%). For the fifteenth month in 16 domestic taxable bond CEFs posted a plus-side return on average (+0.07%), but they underperformed their world income CEFs (+0.18%) and municipal bond CEFs (+0.45%) counterparts. In this report we highlight March 2018 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the second month running equity CEFs witnessed a negative return on average, declining 1.15% on a NAV basis for March, while for the first month in three their fixed income CEF counterparts posted a plus-side return, gaining 0.26% on average for the month.
  • For March only 13% of all CEFs traded at a premium to their NAV, with 17% of equity CEFs and 10% of fixed income CEFs trading in premium territory. World income CEFs witnessed the largest widening of discounts for the month among Thomson Reuters Lipper’s CEF macro-groups—151 basis points (bps) to 8.26%.
  • Real Estate CEFs (+1.51%) posted the strongest plus-side return of all the CEF classifications.
  • Energy MLP CEFs (-7.29%) tanked on revised U.S. pipeline tax rules.
  • For the first month in three the municipal debt CEFs macro-group posted a positive return on average (+0.45%), with all classifications in the group witnessing plus-side returns.

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

Thomson Reuters Lipper delivers data on more than 265,000 collective investments in 61 countries. Find out more.

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