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Closed-End Fund News
Morningstar Commentaries
How Safe Is Your CEF's Distribution?
Jul. 25, 2014 - Morningstar, Inc. -  It’s no secret that income-oriented investing has been all the rage for several years now. This makes a lot of sense, after investors were burned during the 2008 financial crisis. Many now view a bird in hand (income today) as worth more than two in the bush (capital gains at some point in the future).
CEF Update (7/23/14): News You Can Use
Jul. 22, 2014 - Morningstar, Inc. -  It was a quiet week in closed-end fund news.
 
Rights Offerings and Tender Offers 
Nuveen announced tender offers for four of its muni funds.  Nuveen Dividend Advantage Municipal 3 (NZF), Nuveen Dividend Advantage Municipal Income (NVG),  Nuveen Municipal Advantage (NMA), and  Nuveen Quality Income Municipal(NQU) will purchase up to 10% of outstanding common shares for 98% of net asset value on the purchase date. The offer will commence after the funds' 2014 annual shareholder meetings. In conjunction with the tender offer, activist investor Karpus Management agreed to vote their shares in accordance with the recommendations of the board and has agreed to be bound by "standstill" covenants until Sept. 30, 2017.
Market Commentaries
Investor Fatigue Setting In?
Jul. 29, 2014 - BlackRock Blog -  Despite a generally positive tone to earnings season, investors may be finally showing signs of fatigue, as seen by aggressive selling of risky assets, namely high yield and U.S. equities. Russ K explains the implications.
The Energy Trade Is Still Working For Investors

Jul. 24, 2014 - First Trust -  

View from the Observation Deck 

  1. Today's blog post is an update of one we did last December. The areas shaded in orange represent activity since 9/30/13. The price of a barrel of crude oil stood at $103.12, as of 7/23.

Recent Commentaries
Searching for Bargains in Closed-End Funds
Jul. 19, 2014 - Barron's -  Closed-end bond funds have been on a tear this year, returning an average of 11% during the first half, including dividends, according to Closed-End Fund Advisors, a research group. The average yield at the end of June was 6.4%. Compare that with a first-half total return of just 5.4% for SPDR Barclays High Yield Bond (ticker: JNK), an exchange-traded fund that tracks junk bonds.
The Other Discount Advantage
May. 21, 2014 - First Trust -  
When an investor considers investing in a closed-end fund (CEF) that is trading on the secondary market, one of the attributes of the CEF structure that is often appealing isthe ability to purchase shares of a fund at a discount to its net asset value (NAV). Due to the fact that CEFs are equity instruments with shares traded publicly throughout the trading day on an exchange such as the New York Stock Exchange (NYSE), and an investor purchases shares of a CEF at a share price which is independent from the fund’s underlying NAV, its share price can trade at a discount or premium to its NAV. Whereas a CEF’s share price is traded throughout the day on an exchange, a CEF’s NAV is only priced once a day after the market closes
CEF Industry Reports
Select Closed-End Funds by Asset Class List Quarterly: Summer 2014
Jul. 22, 2014 - Wells Fargo Advisors -  
The Select Closed-End Funds by Asset Class List (Select List) includes a broad group of CEFs that are recommended for investors seeking exposure to a certain asset class. The objective of the Select List is to identify what we believe are the most favorable CEFs in multiple asset classes. When reviewing potential candidates, certain characteristics are considered, both quantitative and fundamental, including: valuation, distribution stability, leverage, liquidity, and risk/return profile.
Closed-End Funds Avoid List Quarterly: Summer 2014
Jul. 22, 2014 - Wells Fargo Advisors -  
The Closed-End Funds to Avoid List (Avoid List) is composed of CEFs that violate one or both of the following criteria: 1)a valuation that we believe is excessive (it trades at a substantial premium to net asset value [NAV]); and/or 2)its distribution is at a level that we believe is not sustainable (which may portend a distribution cut or NAV erosion if not cut).
 
The inclusion of a CEF on the Avoid List is a recommendation to liquidate that position from a portfolio.
Featured CEF Fund Reports
Calamos Convertible Opportunities and Income Fund (CHI) Quarterly Commentary
Jun. 30, 2014 - Calamos Investments -  
FUND HIGHLIGHTS
» Current annualized distribution rate of 8.13%
» Designed to provide enhanced fixed income
» Managed by an experienced team
» Closed-end fund portfolio includes a mix of convertible and high yield bonds
» May complement the income portion of an investor’s asset allocation
» Seeks to be less susceptible to rising interest rates than traditional fixed income funds
» Dividend Reinvestment Plan available
Nuveen Quality Preferred Income Funds (JTP, JPS, JHP) - First Quarter 2014

May. 08, 2014 - Nuveen Asset Management -  
The preferred securities market staged a healthy comeback in the first quarter, after becoming oversold, in our view, in the wake of last year’s U.S. Treasury bond market troubles. The retail sector ($25 par) of the preferred market outperformed the institutional sector ($1,000 par) for the period, a reversal from the fourth quarter of 2013.
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