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May 3, 2018

The Month in Closed-End Funds: April 2018

by Tom Roseen.

For the month only 55% of all closed-end funds (CEFs) posted NAV-based returns in the black, with 76% of equity CEFs and 40% of fixed income CEFs chalking up returns in the plus column. A move toward out-of-favor energy-related assets helped the Energy MLP CEFs classification (+9.06%, March’s laggard) jump to the top of the equity charts for the first month in four, followed by Natural Resources CEFs (+6.90%) and Utility CEFs (+2.55%). For the second consecutive month domestic taxable bond CEFs posted a plus-side return on average (+0.34%), bettering their world income CEFs (-0.93%) and municipal bond CEFs (-0.52%) counterparts. In this report we highlight April 2018 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the first month in three equity CEFs witnessed a plus-side return on average, rising 1.66% on a net-asset-value (NAV) basis for April, while for the third month in four their fixed income CEF counterparts posted a negative return, declining 0.15% on average for the month.
  • For April only 15% of all CEFs traded at a premium to their NAV, with 20% of equity CEFs and 10% of fixed income CEFs trading in premium territory. World equity CEFs witnessed the largest widening of discounts for the month among Thomson Reuters Lipper’s CEF macro-groups—31 basis points (bps) to 9.85%.
  • Energy MLP CEFs (+9.06%) posted the strongest plus-side return of all the CEF classifications.
  • Emerging Markets Debt CEFs (-1.92%) posted the lowest return of all the CEF classifications.
  • For the third month in four the municipal debt CEFs macro-group posted a negative return on average (-0.52%), with all classifications in the group witnessing losses for April.

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

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