AICA – Excellence Beyond Indexing

Business Advice

Insight2016-08-01T14:51:33-04:00

Key Take-Aways from CEF Advisors’ Research Call

March 30th, 2020|Comments Off on Key Take-Aways from CEF Advisors’ Research Call

The average closed-end fund through Friday March 20th is down around 40%. Discounts widened; NAVs and market prices both fell. NAV movements reflect both bear market pricing and a lack of trading in the market, a shortage of bids. Most funds are levered (including 90% of bond funds), and leverage magnifies results on the way up and down.

Webinar Summary

March 30th, 2020|Comments Off on Webinar Summary

The average closed-end fund through Friday is down 40%. Discounts widened; NAVs and market prices both fell. NAV movements reflect a lack of trading in the market, a shortage of bids. Most funds are levered (including 90% of bond funds), and leverage magnifies results on the way up and down. For those who remember the Financial Crisis, discounts were wider than they ever got on a single day in October 2008. If you’re in closed-end funds, your brokerage statements look scary, reflecting a sentiment of fear in the market. Volatility is something we talk about with every client, but I can guarantee you that every client we’ve brought on in my entire 18-year career has not seen the current level of discounts that we have.

Shaker: Don’t trade closed-end funds on days when the market is in turmoil

March 27th, 2020|Comments Off on Shaker: Don’t trade closed-end funds on days when the market is in turmoil

Rob Shaker, portfolio manager at Shaker Financial, says that the current market has been hard on closed-end funds because closed-end instruments suffer any time there is fear-based selling. He warns against trading any time CNBC carries a graphic saying 'Markets in turmoil.'...

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Disclosure: This content is provided for informational and educational purposes only and is intended solely as a summary of the views expressed. The opinions expressed are those of the speakers and/or presenters as of the date of the content, are their own opinions, may not be the opinions of AICA and are subject to change without notice.

The information contained herein should not be construed as investment advice, a recommendation to buy or sell any security, or an offer to provide advisory services.

References to specific securities, sectors, investment strategies, or market conditions are for illustrative purposes only and do not constitute investment recommendations. Any discussion of investment strategies may not be suitable for all investors, and there can be no assurance that any strategy will achieve its intended objectives.

Listed closed-end funds (CEFs) and business development companies (BDCs) trade on exchanges at prices that may be above or below their NAVs. There is no guarantee that an investor can sell shares at a price greater than or equal to the purchase price, or that a CEF’s or BDC’s discount will narrow or be eliminated. Non-listed closed-end funds and business development companies do not offer investors daily liquidity, but rather on a quarterly or semi-annual basis, often on a small percentage of shares. CEFs often use leverage, which can increase a fund’s risk or volatility. The actual amount of distributions may vary with fund performance and other conditions.

Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal. Forward-looking statements, expectations, and projections are inherently uncertain, and actual results may differ materially from those discussed.

This content does not take into account the specific investment objectives, financial situation, or particular needs of any individual investor. Prospective investors should consult their financial, legal, and tax advisers before making any investment decision.

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Disclaimer Statement

Active Investment Company Alliance The Active Investment Company Alliance (“AICA”) is a trade association committed to educating and engaging investment professionals and investors about closed-end management companies: listed and non-listed closed-end funds, business development companies, interval funds and tender offer funds. The alliance supports transparency and, therefore, does not allow any agent, employee or representative to personally solicit any investment or accept any monies to be invested in a particular fund or security.

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