The Month In Closed-End Funds: April 2023
Summary
- For the first month in three, equity CEFs (+0.67% on a NAV basis) on average witnessed plus-side performance.
- While their fixed-income CEF cohorts (+0.56%) posted gains for the second consecutive month.
- At month end, 12% of all CEFs traded at a premium to their NAV, with 14% of equity CEFs and 10% of fixed income CEFs trading in premium territory.
- For the first month since October 2019, Developed Markets CEFs (+2.24%) outperformed the other classifications in the equity CEF universe for April.
- High Yield CEFs (Leveraged) (+1.07%) outperformed the other classifications in the domestic taxable fixed income CEF universe for the first month in three.
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For the month, 77% of closed-end funds (CEFs) posted net-asset-value (NAV)-based returns in the black, with 72% of equity CEFs and 81% of fixed income CEFs chalking up returns in the plus column.
Lipper’s world equity CEFs (+0.83%) macro-group for the second month in a row outpaced its two equity-based brethren: domestic equity CEFs (+0.65%) and mixed-assets CEFs (+0.56%). For the first month since October 2019, the Developed Markets CEFs classification (+2.24%) moved to the top of the equity leaderboard, followed by Utility CEFs (+2.13%) and Natural Resources CEFs (+2.09%).
The domestic taxable bond CEFs macro-group—for the second month in three—outpaced the other two macro-groups in the fixed income universe, posting a 0.93% gain on average, followed by world income CEFs (+0.40%) and municipal debt CEFs (-0.00%). Investors pushed High Yield CEFs (Leveraged) (+1.07%) to the top of the domestic taxable fixed income leaderboard for the first month in three, followed by Loan Participation CEFs (+0.99%) and High Yield CEFs (+0.94%).
Year to date, both equity and fixed income CEFs posted plus-side returns on a NAV-basis, rising 3.13% and 3.61%, respectively.
The median discount of all CEFs widened 53 bps to 10.62% for April - wider than the 12-month moving average median discount (8.52%). Equity CEFs’ median discount widened 90 basis points (bps) to 11.63%, while fixed income CEFs’ median discount widened 41 bps to 10.29%.
In this report, we highlight April 2023 CEF performance trends, premiums and discounts, and corporate actions and events.
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