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Closed-End Fund News
Morningstar Commentaries
A Rundown on Return of Capital
Aug. 27, 2014 - Morningstar, Inc. -  Return of capital in closed-end funds is a hot-button issue for investors. On one side of this often-polarizing argument are investors who believe all return of capital is bad and who avoid any fund that has ever distributed return of capital. On the other side are investors who believe return of capital isn't that bad in light of a fund’s discount. The truth lies somewhere in the middle.
Why Do You Own High-Yield Bonds?
Aug. 20, 2014 - Morningstar, Inc. -  The high-yield market was rattled last week causing a $6.5 billion outflow out of high-yield funds and exchange-traded funds for the week ended Aug. 6. This brought a four-week streak of net redemptions totaling $12.5 billion. The massive outflows followed months of commentary suggesting the high-yield market was showing signs of froth and highlighting the risks to this sector after a multiyear bull run. It'll be interesting to see whether these outflows continue or whether investors waiting on the sidelines will now jump back into the fray given slightly higher yields following the sell-off. 
Market Commentaries
What Middle East Tensions Mean for Oil Prices & Equity Portfolios
Aug. 15, 2014 - BlackRock Blog -  With turmoil in the Middle East dominating headlines, many investors are wondering what the recent and growing unrest in the region means for oil prices and for equity portfolios. Russ explains why oil prices are likely to remain elevated for the foreseeable future and why there’s a strong case for sticking with energy stocks even if oil prices don’t spike.
Tight Money, Still A Long Way Off
Aug. 12, 2014 - First Trust -  Going into last month’s Fed meeting, most analysts thought that if anyone dissented it would be Dallas Fed President Richard Fisher, the Federal Reserve’s most outspoken hawk. After all, Fisher had publicly called out the dovish Fed majority only days before the meeting (in an unusually aggressive Wall Street Journal Op-ed), pointing to the risk of “staying too loose, too long” given a “rapidly improving employment picture.”
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
Cohen & Steers Closed-End Fund Strategy
Aug. 21, 2014 - Cohen & Steers -  We would like to share with you our review and outlook for the closed-end fund market as of July 31, 2014. For the month, the market price total return of the Morningstar U.S. All Taxable ex-Foreign Equity Closed-End Fund Index(1) was –2.4%, while its return on net asset value (NAV) was –1.8%. Year to date, the index had a total return of 7.8% based on market price and 7.5% based on NAV. By comparison, the S&P 500 Index(2) and the Barclays Capital U.S. Aggregate Bond Index(3) had total returns of –1.4% and –0.3% for the month, and 5.7% and 3.7% for the year to date, respectively.
Closed-End Funds Monthly: July 2014
Aug. 15, 2014 - Wells Fargo Advisors -  The one-month net asset value (NAV) total returns of closed-end funds (CEFs) reflected a risk-off investment environment in July as fixed-income CEFs, on average, outperformed equity CEFs by more than 100 basis points (100 basis points = 1%) for the first time since January 2014 and second time since February 2013 — -0.2% and -1.9%, respectively.
Featured CEF Fund Reports
Nuveen Quality Preferred Income Funds (JTP, JPS, JHP) - Second Quarter 2014
Aug. 13, 2014 - Nuveen Asset Management -  There were many reasons the preferred securities markets performed well in the second quarter, including anchored short-term interest rates, a decline of 0.25% in long U.S. Treasury yields, and low inflation, which is typically supportive of lower yields overall. Slower gross domestic product (“GDP”) growth and the Federal Reserve’s (the “Fed”) reduction in its 2014 economic growth expectation to a range of 2.1% to 2.3% (with further downward revisions expected) were also beneficial to the preferred securities market because they helped foster low equity volatility.
Nuveen Diversified Currency Opportunities Fund (JGT) - Second Quarter 2014
Aug. 13, 2014 - Nuveen Asset Management -  Although disappointing economic data showed that U.S. gross domestic product (GDP) suffered a much steeper downturn in the first quarter than had previously been reported, subsequent data showed the domestic economy was rebounding nicely. Employment steadily rose, consumer spending advanced at a moderate pace and manufacturing strengthened. Inflation expectations, however, remained remarkably well anchored in the face of the improving labor market.
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