Closed-End Fund First Quarter 2023 Review

First Quarter 2023 Overview

After a positive fourth quarter of 2022 which saw the average closed-end fund (CEF) post a total return of +6.4%, CEFs continued their positive momentum in 1Q23 and rose on average +3.4%. It was a broad rally with total returns of +4.2% for equity CEFs, +3.0% for fixed-income CEFs, +2.7% for municipal CEFs, and +3.2% for taxable fixed-income CEFs. Every category tracked by Morningstar was positive during 1Q23 except for California state specific municipal CEFs (-1.7%) and preferred CEFs (-2.7%). (Source: Morningstar. All data is share price total return) 

Equity CEFs benefitted from a +7.5% total return for the S&P 500 Index and a +7.0% total return from the MSCI ACWI ex USA Index for 1Q23. Fixed-income CEFs benefitted from positive total returns from several key fixed-income indices for 1Q23 including a +3.7% for the ICE BofA High Yield Bond Index, a +3.3% return for the Morningstar® LSTA® US Leveraged Loan Index, a +2.6% return for the ICE BofA 7-12 Year US Municipal Securities Index, a +3.0% return for the Bloomberg US Aggregate Bond Index and a +3.0% return for the Bloomberg Global-Aggregate Index. (Source: Bloomberg)

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Posted on Tuesday, April 18, 2023 @ 9:22 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.