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Closed-End Funds Start Second Quarter 2015 in Attractive Terratory (Discounts and Yield)

Stock Market 2As the new quarter opened, U.S. and European stocks climbed on April 6, giving the Dow Jones Industrial Average a positive for the year. U.S. stocks were also supported by the possibility that the Federal Reserve may delay raising interest rates because of soft U.S. economic data. Oil prices soared on rising demand in both the U.S. and Asia, helping stocks rise.

According to our April 2, 20155 CEF Universe data, there are currently 620 CEFs and BDCs that trade on US exchanges with a total market capitalization of $297.5 Billion. The pricing of CEFs to their net asset value are currently trading at attractive levels for many sectors. Due to concerns over the impact of rising rates on municipal, taxable bond and various equity sector income focused funds, we see discounts, in our opinion, at levels that build in some of the rising rate risk into the funds’ pricing. Read more…

BDC Fourth Quarter 2014 Earings Season and NAV Progress Update

thumbnailBDC-2015-03We have received many of the Debt-BDC portfolio updates for the fourth quarter 2014 and want to share some of the trends we noticed for the sector. We also wanted to give an update on where we see pricing going for BDCs for the rest of 2015. Unlike a month ago, we think the sector has a very good chance to trade at an average premium by year-end.

Recorded on March 9th, 2015

Fourth Quarter 2014 Earnings Call and Business Development Company (BDC) Outlook for 2015

BDC-2015-0224-PreviewVideoWith the start of earnings season for the quarter, we wanted to let investors know what we were expecting for BDCs in both NAV changes and discount levels in the near term and for the rest of 2015. Discounts are historically low and we think NAVs will hold up much better than investors feared with the past 3 months of significant sell-off for BDCs, across most of the 42 debt-based funds in the public market. (Recorded 2/4/15)

Watch the video here:

Investius Interview: High Yield Bond CEFs with John Cole Scott

Investius-HYBonds-2015-01High yield bond closed-end funds may be “overdone” by investors, says John Cole Scott of CEF Advisors.

John Cole Scott, CEF Advisors:

The high yield category for closed-end funds is the opportunity to get a portfolio of bond investments that are below investment grade rated, which has a chance to give you the opportunity for higher returns and higher cash flow over time.

High yield closed-end bond funds in the last six months, on a net asset value basis, are down about 3 ½ percent on average.  We think that the sector, having about 16 percent average energy exposure, has probably been overdone by investors.

Click Here to watch video:

Money Life Talk Show Interview of John Cole Scott by Chuck Jaffe: January 12, 2015

MoneyLifeliveWe discussed the firm’s investment approach, sectors and funds we currently see as attractive (Sr. Loan, MLP, Municipal Bond and Debt focused BDCs), as well as, commentary on some of Chuck’s listeners CEFs of interest for his well-known “Hold It or Fold It” segment.

You can listen to the show by clicking this link: [Click Here]

Or, copy and past the following link:

MoneyLife host Chuck Jaffe is senior columnist for MarketWatch. His three weekly columns are syndicated nationally, and his “Your Funds” column is the most widely read feature on mutual fund investing in America. In 2009, Chuck was named to MutualFundWire’s list of the 40 Most Influential People in Fund Distribution, the only journalist ever to make the list. Learn more on their website:

CEFs / BDCs Discussed:
JQC, JMLP, LEO, ARCC; during “Hold It or Fold It:” ETY, PEO, PGP, BME, TEI

Closed-End Fund Advisors: Fourth Quarter 2014 CEF/BDC Review and Outlook WEBINAR REPLAY Links

CEFU-Webinar-2015-01For those that were not able to attend our Quarterly Research Call on January 8, 2015, we have the replay link and slides in PDF format below. This quarter we covered The Closed-End Fund Universe, both traditional CEFs and BDCs.

We are excited to offer coverage of Business Development Company (BDC) CEFs alongside our coverage of Traditional CEFs. We produce 165 data points on traditional CEFs and 100 on BDCs in our weekly CEF Universe data.

GotoWebinar has a new feature that allows us to load the replay to their website, it can be accessed though the following link:

Slides from the presentation can be downloaded in PDF format using the following link:

If you have any questions about the session or replay links please email or call us (800) 356-3508.

Overview Traditional CEFs: According to our CEF Universe Service dated December 31, 2014, during the fourth quarter of 2014 the traditional closed-end fund universe ended with 571 funds totaling $262B in Total Net Assets, which reflects a net asset growth of about 4.2% during 2014. There were 225 total Equity funds and 346 total Bond funds.  The average Discount to NAV is -7.5%, the average Market Price Yield is 7.3%; 8.2% for Equity funds, 7.9% for Taxable Bond funds, and 5.7% for Municipal Bond funds.  In general, discounts have narrowed about -4.3% during this quarter and a 0.8% below the quarter’s average Discount per fund. US and Non-US Equity funds had generally widened, the narrowing was more prevalent in Municipal funds. This makes many CEF groupings (most Taxable Bond sectors, BDCs, MLP and global equity funds attractive for investors willing to take a slightly contrarian view of the current market environment.

Read more…

Webinar Replay: Accessing CEFs via ETFs, UITs & Separately Managed Accounts

Pristine-CEFNetworkLogoModerated by: Patricia Baronowski-Schneider, President and CEO of Pristine Advisers

Participants: John Cole Scott, Portfolio Manager and EVP of Closed-End Fund Advisors

Kevin Mahn, President and Chief Investment Officer (CIO), Hennion & Walsh Asset  Management  / SmartTrust® UITs

Herb Blank, Head of Business Development, Managing Dir. of ESG Solutions at S-Network Global Indexes and  Steering Committee  Chairperson of QWAFAFEW

During the Session, We Covered:

  • The value of buying exposure to permanent capital with daily liquidity
  • Benefits of low cost leverage to potentially enhance portfolio yield
  • Gaining access to inefficient markets through the generally repeatable alpha of a CEFs discount pattern
  • Balancing fundamental and CEF data in portfolio construction.
  •  Portfolio Selection Criteria for ETFs Accessing Closed-End Funds
  • Strategic and Tactical uses for Closed-End Fund ETFs
  •  Screening for Income Producing CEFs within a UIT
  • Pre-submitted and Live Q&A

Click Here for Replay:  


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