Weekly Closed-End Fund Roundup: Get Ready For An ECC Pullback

ETFS

This article was first released to CEF/ETF Income Laboratory subscribers 2 weeks ago, so data may be out of date. Please check the latest data before making investment decisions.

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 July 12th, 2019.

Weekly performance roundup

22 out of 31 sectors were positive on price (down from 24 last week) and the average price return was +0.24% (down from +0.54% last week). The leading gainers were MLPs (+1.77%), U.S. Energy/Resources Equity (+1.16%) and New York Munis (+1.01%), while Latin American Equity (-1.38%) lagged.



(Source: Stanford Chemist, CEFConnect)

10 out of 31 sectors were positive on NAV (down from 30 last week), while the average NAV return was -0.15% (down from +0.71% last week). The top sector by NAV was MLPs (+1.07%), followed by U.S. Energy/Resources (+0.84%). The lowest sector U.S. Health/Biotech (-1.70%).



(Source: Stanford Chemist, CEFConnect)

Only 4 sectors held a average premium this week, which were Preferreds (+3.09%), Multisector Income (+1.05%%), Emerging Market Income (+0.75%) and U.S. Utilities (+0.74%) while the sector with the highest discount is other Non-US Equity (-12.46%). The average sector discount is -5.79% (up from -6.16% last week).



(Source: Stanford Chemist, CEFConnect)

The sector with the highest premium/discount increase Preferreds (+0.99%), while Other Non-U.S. Equity (-0.47%) showed the largest premium/discount decline. The average change in premium/discount was +0.37% (down from -0.15% last week).



(Source: Stanford Chemist, CEFConnect)

The sector with the highest average 1-year z-score is California Munis (+1.49). This week only two sectors had a negative z-score, the lowest being U.S. Energy/Resources Equity (-0.36) and Other No U.S. Equity (-0.33). The average z-score is +0.71 (up from +0.54 last week).



(Source: Stanford Chemist, CEFConnect)

The sectors with the highest yields are MLPs (10.96%), global equity dividend (9.79%), Global Growth & Income (9.25%), Emerging Market Income (8.89%) and Covered Call (8.44%). Discounts and z-scores for the sectors are included for comparison. The average sector yield is +6.94% (down from +6.95% 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.

Ticker

P/D decrease

Yield

P/D

Z-Score

Price change

NAV change

(PCQ)

-3.71%

4.89%

34.57%

1.3

-3.03%

-0.36%

(MYF)

-3.54%

4.71%

-1.11%

0.0

-3.59%

-0.14%

(HFRO)

-2.63%

6.86%

-6.78%

-0.7

-2.88%

-0.14%

(GLQ)

-2.40%

10.67%

-9.19%

-1.5

-1.94%

0.65%

(PTY)

-2.31%

8.59%

24.47%

0.9

-2.63%

-0.82%

(VBF)

-2.10%

4.35%

-6.62%

0.4

-2.50%

-0.30%

(PDI)

-2.01%

8.46%

10.73%

-0.6

-2.24%

-0.46%

(UTG)

-1.93%

6.03%

-0.78%

0.8

-0.80%

1.12%

(JHAA)

-1.92%

%

0.58%

0.0

-2.44%

-0.58%

(VAM)

-1.84%

9.66%

-3.32%

-2.2

-1.72%

0.14%



(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.

Ticker

P/D increase

Yield

P/D

z-score

Price change

NAV change

(NUW)

6.10%

3.71%

8.19%

3.4

5.85%

-0.12%

(OXLC)

6.09%

15.24%

40.61%

2.0

4.52%

0.00%

(DDF)

4.09%

7.17%

36.28%

2.6

3.74%

0.63%

(ASG)

3.57%

7.74%

0.00%

0.3

4.38%

0.65%

(GGO)

3.40%

5.10%

-7.55%

-0.3

2.02%

-1.74%

(DMO)

3.29%

8.75%

11.20%

2.0

3.15%

0.10%

(EOT)

3.16%

4.08%

11.00%

2.1

3.03%

0.09%

(FLC)

3.10%

6.52%

0.52%

2.2

3.57%

0.38%

(BUI)

2.98%

6.43%

7.47%

1.9

2.22%

-0.61%

(ACP)

2.79%

11.34%

-0.86%

1.6

2.50%

-0.39%



(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

BlackRock MD Muni Bond

(BZM)

-23.2%

0.0474

0.0364

2.95%

-2.95%

1

110%

7/1/2019

7/12/2019

BlackRock Muniyield Inv Qty

(MFT)

-15.3%

0.059

0.05

4.35%

-2.68%

1

106%

7/1/2019

7/12/2019

BlackRock VA Municipal Bond

(BHV)

-15.0%

0.0535

0.0455

3.29%

8.48%

-0.4

105%

7/1/2019

7/12/2019

BlackRock MuniHoldings Inv Qty

(MFL)

-13.3%

0.0525

0.0455

4.11%

-8.65%

0.6

108%

7/1/2019

7/12/2019

BlackRock MuniYield PA Quality

(MPA)

-13.2%

0.053

0.046

3.93%

-12.25%

0.9

115%

7/1/2019

7/12/2019

BlackRock Muni Inc Inv Qty Tr

(BAF)

-12.0%

0.0585

0.0515

4.35%

-6.88%

1

107%

7/1/2019

7/12/2019

BlackRock MuniYield Qty III

(MYI)

-11.9%

0.0505

0.0445

4.05%

-10.39%

0.5

108%

7/1/2019

7/12/2019

BlackRock MuniYield CA Quality

(MCA)

-11.5%

0.052

0.046

3.90%

-9.82%

1.4

111%

7/1/2019

7/12/2019

BlackRock MuniEnhanced

(MEN)

-11.4%

0.044

0.039

4.17%

-6.35%

1.8

110%

7/1/2019

7/12/2019

BlackRock MuniYield CA

(MYC)

-10.4%

0.048

0.043

3.68%

-9.61%

1

109%

7/1/2019

7/12/2019

BlackRock MuniHoldings Qty II

(MUE)

-10.2%

0.049

0.044

4.18%

-8.82%

1.2

107%

7/1/2019

7/12/2019

EV High Inc 2021 Target Term

(EHT)

-9.8%

0.041

0.037

4.48%

-1.00%

1.3

104%

7/1/2019

7/10/2019

BlackRock MuniYield Inv Fund

(MYF)

-9.7%

0.062

0.056

4.71%

-1.11%

0

109%

7/1/2019

7/12/2019

BlackRock Municipal 2020

(BKK)

-9.4%

0.0318

0.0288

2.29%

-0.33%

1.5

111%

7/1/2019

7/12/2019

Massachusetts Tax-Exempt Trust

(MHE)

-9.1%

0.044

0.04

3.69%

-5.61%

1

103%

7/1/2019

7/12/2019

BlackRock Municipal Income

(BFK)

-8.5%

0.0585

0.0535

4.60%

-2.65%

1.2

105%

7/1/2019

7/12/2019

BlackRock MuniYield Arizona

(MZA)

-8.5%

0.047

0.043

3.71%

-5.27%

-0.1

107%

7/1/2019

7/12/2019

BlackRock MuniHoldings CA Qty

(MUC)

-8.4%

0.0475

0.0435

3.80%

-11.23%

1.3

110%

7/1/2019

7/12/2019

BlackRock MuniYield Quality II

(MQT)

-8.3%

0.048

0.044

4.18%

-9.98%

0.9

109%

7/1/2019

7/12/2019

BlackRock MuniHoldings Fund II

(MUH)

-8.1%

0.0615

0.0565

4.46%

-2.44%

1.4

108%

7/1/2019

7/12/2019

BlackRock MuniVest

(MVF)

-7.8%

0.0385

0.0355

4.65%

-4.28%

0.7

104%

7/1/2019

7/12/2019

BlackRock Core Bond

(BHK)

-7.7%

0.065

0.06

5.16%

-6.06%

1.2

97%

7/1/2019

7/12/2019

BlackRock Muni Inc Qty Trust

(BYM)

-7.7%

0.052

0.048

4.13%

-8.89%

1.6

108%

7/1/2019

7/12/2019

BlackRock Municipal Income Inv

(BBF)

-6.9%

0.058

0.054

4.57%

0.93%

1.2

104%

7/1/2019

7/12/2019

BlackRock CA Municipal Income

(BFZ)

-6.7%

0.0445

0.0415

3.73%

-11.76%

1.3

106%

7/1/2019

7/12/2019

BlackRock MuniVest Fund II

(MVT)

-6.7%

0.0595

0.0555

4.44%

-0.63%

1.1

106%

7/1/2019

7/12/2019

BlackRock MuniHoldings Fund

(MHD)

-5.9%

0.0675

0.0635

4.45%

2.03%

2.2

104%

7/1/2019

7/12/2019

BlackRock Taxable Muni Bond

(BBN)

-5.9%

0.1188

0.1118

5.69%

-1.67%

1.1

104%

7/1/2019

7/12/2019

BlackRock MuniYield MI Quality

(MIY)

-5.8%

0.052

0.049

4.22%

-10.70%

1.9

102%

7/1/2019

7/12/2019

BlackRock MuniYield Quality

(MQY)

-5.4%

0.056

0.053

4.36%

-8.70%

1.1

106%

7/1/2019

7/12/2019

BlackRock MuniYield

(MYD)

-5.1%

0.059

0.056

4.64%

-2.03%

1.1

105%

7/1/2019

7/12/2019

BlackRock MuniAssets Fund

(MUA)

-3.7%

0.0545

0.0525

4.07%

8.56%

1.6

107%

7/1/2019

7/12/2019

BlackRock Strategic Muni

(BSD)

-3.5%

0.057

0.055

4.58%

0.07%

2.7

104%

7/1/2019

7/12/2019

MFS Investment Grade Muni

(CXH)

-2.8%

0.0355

0.0345

4.26%

-9.34%

1.1

114%

7/1/2019

7/16/2019

MFS High Income Municipal

(CXE)

-2.4%

0.021

0.0205

4.68%

-3.04%

1.3

113%

7/1/2019

7/16/2019

Templeton Emerging Mkts Income

(TEI)

-2.2%

0.067

0.0655

7.77%

-8.67%

0.4

102%

7/1/2019

7/12/2019

EV Senior Floating Rate

(EFR)

-1.3%

0.076

0.075

6.64%

-11.50%

-0.4

99%

7/1/2019

7/23/2019

EV Floating Rate Income

(EFT)

-1.3%

0.076

0.075

6.35%

-11.11%

-0.2

89%

7/1/2019

7/23/2019

EV Floating-Rate Inc Plus Fund

(EFF)

-1.2%

0.083

0.082

6.40%

-12.74%

-0.1

97%

7/1/2019

7/23/2019

Delaware Inv Div & Inc

(DDF)

-0.8%

0.0918

0.0911

7.17%

36.28%

2.6

23%

7/2/2019

7/18/2019

Delaware Enhanced Gbl Div&Inc

(DEX)

-0.1%

0.0918

0.0917

11.04%

-10.58%

-0.1

48%

7/2/2019

7/18/2019

Clough Global Equity

(GLQ)

-0.1%

0.1126

0.1125

10.67%

-9.19%

-1.5

2%

7/12/2019

7/19/2019



(Source: Stanford Chemist, CEFConnect)

Boosters

Name

Ticker

Change

Previous

Current

Yield

Discount

z-score

Coverage

Announced

Ex-date

MFS Intermediate High Income

(CIF)

0.4%

0.02012

0.0202

9.51%

-1.16%

0.3

59%

7/1/2019

7/16/2019

MFS Intermediate Income

(MIN)

0.9%

0.02858

0.02883

9.06%

-6.14%

1.6

30%

7/1/2019

7/16/2019

Clough Global Div and Inc Fund

(GLV)

0.9%

0.1023

0.1032

11.19%

-11.01%

-0.6

19%

7/12/2019

7/19/2019

MFS Multi-Market Income

(MMT)

1.1%

0.04148

0.04192

8.61%

-8.32%

1.1

54%

7/1/2019

7/16/2019

MFS Government Markets Income

(MGF)

1.3%

0.02854

0.02891

7.64%

-5.02%

0.5

35%

7/1/2019

7/16/2019

MFS Charter Income

(MCR)

1.3%

0.05848

0.05925

8.69%

-8.81%

1.5

49%

7/1/2019

7/16/2019

MFS Special Value Trust

(MFV)

1.6%

0.04537

0.04611

9.59%

2.30%

0.8

29%

7/1/2019

7/16/2019

Templeton Global Income

(GIM)

2.3%

0.035

0.0358

6.63%

-10.50%

1.2

89%

7/1/2019

7/12/2019

Invesco VK Dynamic Cred Opps

(VTA)

4.0%

0.0625

0.065

6.98%

-11.56%

1.2

75%

7/1/2019

7/16/2019

PIMCO Dynamic Credit Income

(PCI)

6.1%

0.16406

0.174

8.70%

1.91%

0.6

96%

7/1/2019

7/11/2019

BlackRock Enhanced Equity Div

(BDJ)

7.1%

0.0467

0.05

6.67%

-7.32%

0.5

32%

7/1/2019

7/12/2019

BlackRock Floating Rate Inc Tr

(BGT)

8.1%

0.0618

0.0668

6.44%

-11.58%

-0.3

105%

7/1/2019

7/12/2019

Invesco Senior Income

(VVR)

9.5%

0.021

0.023

6.51%

-11.30%

0.8

88%

7/1/2019

7/16/2019



(Source: Stanford Chemist, CEFConnect)

CEF analysis from around Seeking Alpha…

ADS Analytics presents How We Are Playing The PIMCO CEF Suite (Jul. 7)

Arbitrage Trader presents Weekly Review: High-Yield CEFs – A Slight Decrease In The First Week Of July (Jul. 9), Weekly Review: Municipal Bond CEFs – PCQ Almost Reached 40% Premium (Jul. 11), Weekly Review Of Preferred Stock CEFs: Statistically There Are No Undervalued Funds (Jul. 11)

Dividend Seeker presents PCQ: Don’t Pull A Muscle While Stretching For Yield (Jul. 9)

Douglas Albo presents Equity CEFs: Go Big Or Go Home (Jul. 9)

Nick Ackerman presents HTD: A Defensive Fund With A Healthy Distribution (Jul. 9), CSQ: 7.69% Monthly Payer With Growth Potential (Jul. 11)

Power Hedge presents KYN: A Fund To Play Strong Midstream Fundamentals (Jul. 9)

RockieK presents Critical Commentary On Closed End Fund – Nuveen Energy MLP (Jul. 8)

*Stanford Chemist presents Weekly Closed-End Fund Roundup: Watch Your Holdings (Jul. 8)

Strubel Investment Management presents GLO: Another Middle Of The Pack Tactical Fund (Jul. 6), EXG: When A Covered Call Strategy Isn’t Working (Jul. 10), ETG: A Volatile Leveraged Dividend Fund (Jul. 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: Same Bull Market Story – New Market Highs And No One Believes (Jul. 13)

Jeff Miller presents Weighing The Week Ahead: How Much Has Economic Weakness Hurt Corporate Earnings? (Jul. 14)

Lance Roberts presents S&P 3,300 – The Bull Vs. Bear Case (Jul. 14)

Commentary

Not much in the way of CEF news or distribution changes this week.

The top 10 premium/discount gainers and losers are often good ways to quickly scan for buy or sell opportunities. For example, Nuveen Amt-Free Municipal Value Fund (NUW) was the top premium gainer with a +6.10% valuation increase, making it temporarily overvalued with a 1-year z-score of +3.4.



(July 29 update: NUW is down -4.1% since then)

OXLC also performed well this week recording a premium/discount increase of +6.09%, which all came from price increase since the NAV updates only quarterly. However, note that the current listed premium of +40.61% for OXLC is stale since the database has not yet updated OXLC’s latest NAV of $8.32 (as of 3/31). This puts its “current” premium at +27.64%.

To get the latest premium/discount estimates for OXLC as well as peer OFS Credit Company (OCCI), we can use the latest NAV number (for 6/30) released by Eagle Point Credit Company (ECC). Of the three CLO equity funds, only ECC updates its NAV monthly so we can use this as a benchmark to estimate the latest premiums for the two other funds making some simple assumptions.

Here’s the latest premium/discount estimates for the three funds. OCCI still remains at a significant discount to the other two CLO equity funds, which may be a deserved discount due to its lack of transparency regarding distribution coverage as well as its impending rights offering.



ECC is still at a higher premium than OXLC, but as of writing ECC is down -2.04% in the pre-market since its NAV estimate of $13.40-$13.50 for 6/30 released recently is down -4.5% at the mid-point from last month’s NAV of $14.09.

Given how strongly ECC has performed recently, some pullback might be expected, and this latest NAV print just might be the catalyst. Here’s the YTD total return figures for the three CLO equity funds.

Chart

Data by

YCharts

As I mentioned in the chat, I would be comfortable selling or trimming ECC if it gaps down by -3% or less today. Anything more than that we would re-assess and play it by ear. To put things in perspective, even a -5% drop to $17.70 would simply bring it back to where it was at the start of this month. As a reminder, we own a fairly large position of ECC in our Income Generator portfolio and we may trim a bit today based on the above analysis.



(July 29 update: ECC is down -6.7% since then)

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Disclosure: I am/we are long THE PORTFOLIOS. 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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