Closed-end Fund Review - First Quarter 2021
Following a very strong fourth quarter of 2020 when the average closed-end fund (CEF) increased by 12.75% (, CEFs continued their positive momentum and gained 6.42% for the first quarter of 2021. It was a broad rally with equity CEFs rising 11.94%, fixed-income CEFs gaining 3.36%, municipal CEFs increasing 1.72% and taxable fixed-income CEFs growing 4.71%. Equity CEFs benefitted from the 6.17% increase in the S&P 500 Index as well as the 3.49% increase in the MSCI All-Country World Ex US Index. Fixed-income CEFs (particularly credit sensitive fixed-income CEFs) benefitted from strength in the underlying high-yield bond and leveraged loan markets. The ICE BofA High-Yield Bond Index was up 0.91% for the first quarter, while the S&P/LSTA Leveraged Loan Index gained 1.78%. Despite a decrease of 0.64% for the ICE BofA 7-12 Yr. Municipal Index during the quarter, municipal CEFs increased 1.72%—which, in my view, reflects the demand for the attractive 4.26% distribution yield the average municipal CEF provides. 
(Source: Morningstar. All performance is based on share price total return).

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Posted on Thursday, April 22, 2021 @ 9:04 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.