July 6, 2018

The Month in Closed-End Funds: June 2018

by Tom Roseen.

For the month 65% of all closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 57% of equity CEFs and 71% of fixed income CEFs chalking up returns in the plus column. A move toward income- and growth-oriented assets helped the Utilities CEFs classification (+1.80%) rise to the top of the equity charts for the first month in seven, followed by Growth CEFs (+1.72%) and Real Estate CEFs (+1.54%). For the second consecutive month municipal bond CEFs posted a plus-side return on average (+0.12%), bettering their domestic taxable bond CEFs (+0.09%) and world income CEFs (-1.82%) counterparts. In this report we highlight June 2018 CEF performance trends, premiums and discounts, and corporate actions and events.

Highlights:

  • For the third consecutive month equity CEFs witnessed a plus-side return on average, however rising only 0.11% on a NAV basis for June. Meanwhile, for the second month in three their fixed income CEF counterparts posted a negative return, declining 0.01% on average for the month.
  • For June only 17% of all CEFs traded at a premium to their NAV, with 26% of equity CEFs and 11% of fixed income CEFs trading in premium territory. High-yield CEFs witnessed the largest narrowing of discounts for the month among Thomson Reuters Lipper’s CEF macro-groups—32 basis points (bps) to 9.87%.
  • Utilities CEFs (+1.80%) for the first month in seven posted the strongest plus-side return of all the CEF classifications.
  • Pacific ex-Japan CEFs (-5.72%) posted the lowest return of all the CEF classifications.
  • For the second month in a row the municipal debt CEFs macro-group posted a plus-side return on average (+0.12%), with all but one classification in the group witnessing gains for June.

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

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