After a difficult first six weeks of the year, most categories of the closed-end fund (CEF) marketplace rallied strongly during the second half of the first quarter. Indeed, the average CEF finished the quarter up 2.73% on a share price total return basis (According to Morningstar). At the start of the first quarter, many CEFs were negatively impacted by the significant sell-off in the global equity markets, decline in oil prices (which impacted the credit markets) and an overall palpable risk-off mentality that clearly existed among retail investors. However, by the middle of the quarter as the equity markets began to rally, oil prices firmed and some reassuring economic data was released, investors began to take advantage of the wider-than average historical discounts to net asset value (NAV) which existed for many CEFs and performance began to improve meaningfully during the last half of the quarter.
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