Weekly Closed-End Fund Roundup: MAV Boosts Again (August 16, 2020)

ETFS

Author’s note: This article was released to members on August 19, 2020. Please check latest data before investing.

The Weekly Closed-End Fund Roundup will be put out at the start of each week to summarize recent price movements in closed-end fund [CEF] sectors in the last week, as well as to highlight recently concluded or upcoming corporate actions on CEFs, such as tender offers. Most of the information has been sourced from CEFInsight or the Closed-End Fund Center. I will also link to some articles from Seeking Alpha that I have found for useful reading over the past week. The searchable tag for this feature is “cildoc”. Data is taken from the close of Friday, August 14th, 2020.

Weekly performance roundup

13 out of 23 sectors were positive on price (down from 23 last week) and the average price return was +0.03% (up from -2.25% last week). The lead gainer was MLPs (+4.09%), followed by Global Equity (+1.59%) and U.S. Equity (+1.22%), while the weakest sectors by price were Commodities (-5.31%), followed by Taxable Munis (-3.90%) and New York Munis (-0.62%).

(Source: Stanford Chemist, CEFConnect)

9 out of 23 sectors were positive on NAV (down from 22 last week), while the average NAV return was -0.21% (down from +1.70% last week). The top sectors by NAV were MLPs (+2.56%), Global Equity (+1.12%) and U.S. Equity (+0.93%). The weakest sectors by NAV were Commodities (-4.53%), Taxable Munis (-1.37%) and Real Estate (-0.95%).

(Source: Stanford Chemist, CEFConnect)

There were only three premium sectors this week, the leader was Preferreds (+3.00%), while the sector with the highest discount is MLPs (-23.50%). The average sector discount is -6.73% (up from -6.99% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium/discount increase was MLPs (+1.12%), while Taxable Munis (-2.63%) showed the lowest premium/discount decline. The average change in premium/discount was +0.17% (up from +0.94% last week).

(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is Single-state Munis (+0.58), followed by California Munis (+0.57). The sector with the lowest average 1-year z-score was MLPs (-1.47), followed by Emerging Market Income (-0.81). The average z-score is -0.23 (up from -0.26 last week).

(Source: Stanford Chemist, CEFConnect)

The sectors with the highest yields are MLPs (15.95%), Global Allocation (10.98%), Real Estate (9.45%), Limited Duration (9.41%) and Multisector Income (8.98%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is +7.39% (same as last week).

(Source: Stanford Chemist, CEFConnect)

Individual CEFs that have undergone a significant decrease in premium/discount value over the past week, coupled optionally with an increasing NAV trend, a negative z-score, and/or are trading at a discount, are potential buy candidates.

Fund

Ticker

P/D decrease

Yield

P/D

Z-Score

Price change

NAV change

Nuveen Taxable Municipal Income

(NBB)

-5.26%

5.05%

-2.31%

-0.4

-5.34%

-0.22%

Flaherty & Crumrine Dynamic Pref & Income Fund

(DFP)

-4.21%

6.88%

3.80%

0.8

-2.34%

1.65%

Flaherty & Crumrine/Claymore Total Return Fund

(FLC)

-4.21%

6.81%

1.77%

0.1

-2.69%

1.35%

Gabelli Go Anywhere Trust

(GGO)

-4.20%

1.76%

-10.90%

-0.3

-1.77%

2.87%

Oxford Lane Capital Corp

(OXLC)

-4.03%

18.49%

35.60%

-0.9

-2.88%

0.00%

BlackRock Taxable Municipal Bond Trust

(BBN)

-3.31%

5.33%

0.92%

0.6

-5.62%

-2.50%

John Hancock Preferred Income

(HPI)

-3.09%

7.14%

10.66%

1.1

-2.21%

0.54%

BNY Mellon Strategic Municipals

(LEO)

-2.92%

5.02%

-1.53%

0.5

-3.46%

-0.58%

BlackRock Health Sciences Trust II

(BMEZ)

-2.73%

5.06%

-6.08%

0.0

-3.53%

-0.71%

MainStay DefinedTerm Muni Opp

(MMD)

-2.57%

4.82%

2.32%

0.2

-2.98%

-0.53%

(Source: Stanford Chemist, CEFConnect)

Conversely, individual CEFs that have undergone a significant increase in premium/discount value in the past week, coupled optionally with a decreasing NAV trend, a positive z-score, and/or are trading at a premium, are potential sell candidates.

Fund

Ticker

P/D increase

Yield

P/D

z-score

Price change

NAV change

Western Asset Invstm Grd Dfnd Opp Tr Inc

(IGI)

6.54%

3.61%

8.66%

2.3

4.99%

-1.32%

Highland Income Fund

(HFRO)

5.71%

10.37%

-28.96%

-0.8

9.51%

0.72%

Delaware Investments Dividend & Income

(DDF)

4.87%

7.38%

-2.98%

-1.3

5.15%

-0.11%

First Trust Spec Finance & Fincl Opp

(FGB)

4.58%

16.98%

3.92%

-0.3

6.00%

1.32%

BlackRock Utility & Infra Trust

(BUI)

4.05%

6.42%

3.67%

0.0

3.48%

-0.55%

ClearBridge Energy MLP Opportunity

(EMO)

3.76%

10.02%

-24.23%

-0.5

9.63%

4.20%

Cohen & Steers Closed-End Opportunity

(FOF)

3.48%

8.78%

0.59%

1.3

3.75%

0.17%

BlackRock MD Municipal Bond

(BZM)

3.23%

3.43%

-2.88%

0.3

2.63%

-0.78%

John Hancock Financial Opportunity

(BTO)

3.11%

9.26%

6.40%

2.8

5.41%

7.15%

Voya Emerging Markets High Div Eq Fd

(IHD)

2.90%

10.67%

-10.48%

-0.2

4.17%

0.80%

(Source: Stanford Chemist, CEFConnect)

Distribution changes announced this month

These are sorted in ascending order of distribution change percentage. Funds with distribution changes announced this month are included. Any distribution declarations made this week are in bold. I’ve also added monthly/quarterly information as well as yield, coverage (after the boost/cut), discount and 1-year z-score information. I’ve separated the funds into two sub-categories, cutters and boosters.

Cutters

Name

Ticker

Change

Previous

Current

Yield

Discount

z-score

Coverage

Announced

Ex-date

Templeton Emerg Mkts Income

(TEI)

-29.8%

0.0506

0.0355

5.55%

-14.49%

-1.0

134%

8/3/2020

8/14/2020

Ivy High Income Opportunities Fund

(IVH)

-10.0%

0.1

0.09

8.88%

-9.64%

0.3

113%

8/3/2020

8/14/2020

Voya Prime Rate Trust

(PPR)

-2.0%

0.0148

0.0145

3.94%

-7.14%

1.0

152%

8/3/2020

8/7/2020

Templeton Global Income

(GIM)

-1.9%

0.0155

0.0152

3.39%

-12.66%

-0.3

189%

8/3/2020

8/14/2020

Boosters

Name

Ticker

Change

Previous

Current

Yield

Discount

z-score

Coverage

Announced

Ex-date

MFS Intermediate Income

(MIN)

0.1%

0.02854

0.02856

8.74%

-2.97%

1.9

28%

8/3/2020

8/18/2020

MFS Special Value

(MFV)

0.2%

0.04314

0.04323

9.68%

0.94%

-0.8

28%

8/3/2020

8/18/2020

MFS Government Markets Income

(MGF)

0.3%

0.02928

0.02938

7.42%

-2.06%

1.5

29%

8/3/2020

8/18/2020

MFS Intermediate High Income

(CIF)

0.7%

0.01871

0.01884

9.70%

-4.51%

-0.7

60%

8/3/2020

8/18/2020

MFS Charter Income

(MCR)

0.9%

0.05774

0.05825

8.05%

-2.14%

1.9

52%

8/3/2020

8/18/2020

MFS Multimarket Income

(MMT)

1.2%

0.04074

0.04124

8.36%

-6.33%

0.1

58%

8/3/2020

8/18/2020

Delaware Investments Dividend & Income

(DDF)

2.7%

0.0526

0.054

7.38%

-2.98%

-1.3

41%

8/4/2020

8/20/2020

Delaware Enhanced Global Div and Inc

(DEX)

2.8%

0.0499

0.0513

6.72%

-8.31%

0.7

52%

8/4/2020

8/20/2020

Invesco PA Value

(VPV)

3.5%

0.0483

0.05

4.60%

-7.65%

0.3

97%

8/3/2020

8/13/2020

Pioneer Floating Rate Trust

(PHD)

4.2%

0.06

0.0625

7.62%

-9.01%

0.8

92%

8/4/2020

8/18/2020

Pioneer Municipal High Income Advantage

(MAV)

5.9%

0.0425

0.045

4.77%

-8.12%

1.0

91%

8/4/2020

8/18/2020

Invesco Quality Municipal Income Trust

(IQI)

6.8%

0.0487

0.052

4.95%

-7.96%

0.2

91%

8/3/2020

8/13/2020

Eaton Vance Floating-Rate Income

(EFT)

7.0%

0.057

0.061

6.18%

-13.64%

-0.6

103%

8/3/2020

8/21/2020

Invesco Value Muni Income

(IIM)

7.1%

0.056

0.06

4.72%

-8.01%

0.1

94%

8/3/2020

8/13/2020

Pioneer Diversified High Income

(HNW)

7.9%

0.095

0.1025

9.41%

-9.86%

0.3

98%

8/4/2020

8/18/2020

Invesco Adv Muni Inc II

(VKI)

8.1%

0.043

0.0465

5.02%

-7.80%

0.2

91%

8/3/2020

8/13/2020

Invesco Tr Inv Gr Muni

(VGM)

8.5%

0.0493

0.0535

5.01%

-7.90%

0.2

91%

8/3/2020

8/13/2020

Invesco Muni Opp

(VMO)

8.8%

0.0478

0.052

4.97%

-6.89%

0.6

92%

8/3/2020

8/13/2020

Invesco CA Value

(VCV)

10.5%

0.043

0.0475

4.50%

-7.28%

0.1

97%

8/3/2020

8/13/2020

Eaton Vance Senior Income

(EVF)

14.8%

0.027

0.031

6.39%

-8.49%

1.1

115%

8/3/2020

8/12/2020

Fiduciary-Claymore Energy Infrastructure

(FMO)

50.8%

0.1625

0.245

10.61%

-24.39%

-1.9

0%

8/4/2020

8/13/2020

CEF analysis from around Seeking Alpha…

ADS Analytics presents PHK: A More Defensive PIMCO Option (Aug. 12), How To Strengthen High-Yield Allocations With Term CEFs (Aug. 14)

Alpha Gen Capital presents Evaluating The Floating Rate CEF Space With A Systematic Eye (Aug. 10)

Douglas Albo presents Equity CEFs: Why I Went Positive On DDF Last Friday (Aug. 11)

Nick Ackerman presents ACV: A Convertible Fund With Appeal And Strong Performance (Aug. 10), Closed-End Funds: Taking A Dive Into Calamos’ Offerings – 2 Funds Look Like A Buy (Aug. 13), ETY: Attractive Discount Presenting An Opportunity With This Eaton Vance Fund (Aug. 14)

*Stanford Chemist presents Weekly Closed-End Fund Roundup: August 2, 2020 (Aug. 11), Activists Continue To Hold Out In WIA (Aug. 11), The Chemist’s ‘High-High-Low’ Closed-End Fund Report: July 2020 (Aug. 13)

The Value Trend presents HGLB: Not Worth It (Aug. 11)

*To subscribers: these link to the public version of the article, which you will already have seen in the members section.

Macro/market section

Fear & Greed Trader presents S&P 500 Weekly Update: A Resilient Market Grinds Closer To A New High (Aug. 15)

Jeff Miller presents Weighing The Week Ahead: Do Housing Market Shifts Offer An Opportunity To Investors? (Aug. 16)

Lance Roberts presents ‘Close But No Cigar,’ Bulls Fail To Capture Market Highs (Aug. 16)

Commentary

The August distribution changes have been updated in our database! Pleasingly, we see a continued trend of more boosters than cutters, albeit with many of the boosts being of the smaller variety. None of our portfolio holdings suffered cuts.

Notably, Pioneer Municipal High Income Advantage Trust (MAV), a holding in both our Tactical Income-100 and Taxable Income portfolios, boosted its distribution again, from $0.0425 to $0.045 (+5.9%) per month. This is the second time that MAV has increased its distribution in the last 12 months, and its current distribution is now +20% higher than it was a year ago. The current tax-free yield is 4.82%.

(Source: CEFConnect)

From the press release, we can possibly infer that MAV managed to pick up bargains in the high yield municipal bond market during the recent sell-off, boosting future earning potential:

“MAV’s August distribution of $0.0450 per share represents a 5.90% increase from $0.0425 per share paid in July. The increase was due primarily to select opportunities in the high yield municipal bond market. This change better aligns the Fund’s distribution rate with its current and projected level of earnings and reserves.”

The recent strong performance of MAV vis-a-vis the municipal bond benchmark the iShares National Muni Bond ETF (MUB) as well as the generally solid Nuveen Municipal High Income Opportunity Fund (NMZ) has narrowed MAV’s discount considerably to -8.65% and it now has a slightly positive z-score of +0.8.

————————————

Scanning through the list of boosters, I noticed that Eaton Vance Senior Income Trust (EVF) was the second-highest booster at a +14.8% increase. However, we can see that EVF is one of the funds that readjusts their distribution monthly, and like other senior loan funds, its distribution level is still down significantly from a year ago as expected due to falling interest rates.

(Source: CEFConnect)

Interestingly, EVF appears to have a significantly narrower discount of -8.46% compared to the very similar Eaton Vance Floating Rate Income Trust (EFT) (-13.05% discount) or Eaton Vance Senior Floating Rate Trust (EFR) (-12.30%). Hence, a swap from EVF to EFT or EFR is recommended.

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Disclosure: I am/we are long BBN, MAV, OXLC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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