Closed-End Fund Second Quarter 2022 Review

Second Quarter 2022 Overview

After a very difficult first quarter of 2022 for the equity and credit markets (click here for first quarter commentary) as well as for many closed-end funds (CEFs), the second quarter of 2022 was also a challenging one. Concerns about the potential for a recession in 2022, elevated inflation data as well as rising short- and long-term interest rates contributed to a tough quarter for many asset classes in the second quarter. The total return for the average CEF was -11.2% for the quarter and -17.4% for the year, as of 6/30/22. Every single CEF category tracked by Morningstar posted negative total returns for the quarter and only the master limited partnership (MLP) category was positive year-to-date (YTD), as of 6/30/22, with a return of 11.9%. For the second quarter, equity CEFs returned -14.0%, fixed-income CEFs returned -9.4%, municipal CEFs returned -7.2%, and taxable fixed-income CEFs returned -11.1%. 

Source for CEF performance: Morningstar. All performance is based on share price total return.

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Posted on Tuesday, July 19, 2022 @ 2:28 PM

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.