Core Insights - The article provides an update on the PIMCO CEF suite, focusing on distribution coverage changes and the allocation profile of the Dynamic Income Strategy Fund (PDX) [1] Distribution Coverage Update - Distribution coverage across taxable and tax-exempt suites has continued to grow, with PDO being the only taxable PIMCO CEF with coverage above 100% at 116%, while the average for the rest is 73% [2] - Municipal fund coverage levels have risen to an average of 113%, with all PIMCO Muni CEFs exceeding 100% coverage, despite stable short-term rates and fixed asset coupons [4][5] - The increase in Muni coverage may be attributed to falling Muni yields, rotation into higher-coupon Municipal bonds, and a buyback of expensive auction-rate preferreds [5][6] PDX Fund Allocation - PDX has shifted its strategy from being energy-focused to a more diversified approach, now allocating only 2.7% to the energy sector, while maintaining a significant allocation to equities and MLPs [8][10] - The fund's current allocation aligns with its strategy guidelines, and it is not expected to shift significantly in the near term [11] - PDX's discount has stalled around a double-digit level, contrasting with a double-digit average premium in the rest of the PIMCO taxable suite [11] Performance and Valuation - Taxable PIMCO funds with strong year-to-date returns include PAXS and PDO, with PDX outperforming due to the strength of the MLP sector [12] - The average premium of taxable PIMCO CEFs is around 18% above the rest of the taxable CEF market, indicating a relatively high valuation compared to historical levels [14] - NAVs of taxable funds have fallen significantly since 2022, making them more attractive to some investors due to increased distribution rates [18] Market Environment - The performance of CEFs is influenced by broader market conditions, with current valuations indicating a potentially expensive environment for new capital [20] - The article suggests that better entry points for CEFs may be available in the medium term as discounts widen and nominal interest rates rise [20]

0.000 Adam Smigielski Welcome to another installment of our CEF Market Weekly Review, where we diseuss closed-end fund ("CTF") market activity from both the bottom-up - highlighting individual fund news and events - as well as the top-down - providing an overview of the broader market. We also try to provide some historical context as well as the relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the fourth week of August. Be sure ...

thad In his 2004 work, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, author James Surowiecki explores case studies that prove large groups of people are more intelligent than the elite few. Crowds are better at solving complex problems, creating innovation, coming to wise decisions, and predicting the future. The book's brilliance stems from its simplicity. As a trader in markets since the early 1980s, Surowiecki's Wi ...

shih-wei Welcome to another installment of our CEF Market Weekly Review, where we discuss closed-end fund ("CEF") market activity from both the bottom-up – highlighting individual fund news and events – as well as the top-down – providing an overview of the broader market. We also try to provide some historical context as well as the relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the third week of August. Be sure to check out o ...

ridvan_celik Welcome to another installment of our CEF Market Weekly Review, where we discuss closed-end fund ("CEF") market activity from both the bottom-up - highlighting individual fund news and events - as well as the top-down - providing an overview of the broader market. We also try to provide some historical context as well as the relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the second week of August. Be sure to check ...

Core Insights - The Liberty All-Star Funds utilize a multi-manager approach to enhance performance consistency and leverage the unique strengths of each manager [2][3][6] - The All-Star Growth Fund (ASG) focuses on an all-cap growth portfolio, while the All-Star Equity Fund (USA) emphasizes large-cap investments, blending growth and value strategies [3][6] - The funds have specific distribution policies, with USA targeting a 10% annual distribution and ASG aiming for 8% annually, supported by their multi-manager structure [5][6] Fund Structure and Strategy - The multi-manager approach is designed to blend different investment styles, which helps in navigating various market cycles and supports the overall investment philosophy [3][4] - The selection process for portfolio managers is based on the "five Ps": people, process, philosophy, parent organization, and performance, ensuring a complementary fit among managers [4][5] - The funds have experienced a total of 10 manager changes for ASG since 1995 and 19 for USA since 1986, indicating a careful and systematic approach to manager evaluation and replacement [5] Current Portfolio Positioning - ASG is currently overweight in financials and healthcare while underweight in technology, reflecting a strategic allocation based on market conditions [6] - USA is also overweight in financials and underweight in technology, with a diversified portfolio that differs from the S&P 500, showcasing a lower capitalization [6][7] Investor Considerations - The closed-end fund structure of USA and ASG offers equity-like returns along with a steady income stream, making them suitable for investors seeking both growth and income [6][7] - The unique multi-manager structure is highlighted as a competitive advantage, particularly for retirement portfolios, as it provides liquidity, transparency, and growth potential [6][7] - Consistency in performance is emphasized as crucial for supporting distribution policies and enhancing investor satisfaction, particularly in light of behavioral tendencies among retail investors [7]

Market Overview - CEF performance varied, with equity-linked sectors declining while longer-duration, higher-quality sectors like Munis outperformed due to a sharp fall in 10-year Treasury yields, boosting Muni prices [2] - July ended positively with nearly a 3% gain across the CEF space before an early August market hiccup [2] Market Themes - NYSE proposed an amendment to eliminate the requirement for CEFs to hold annual shareholder meetings, which could impact shareholder voting on fund board members [3] - The NYSE argues that existing protections for CEF shareholders under the 1940 Investment Company Act would remain intact, despite concerns about reduced competition and oversight [3] - Saba is actively campaigning against the proposed rule change, emphasizing the importance of regular elections for maintaining competitive pressure on CEFs [3] Fund Performance - Saba's CEFs reported that approximately 39% of distributions for the fiscal year-to-date came from net investment income, with BRW showing net investment income around 5.5% and SABA at 3.3% [4][5] - The relative value analysis indicated that SABA was previously a more attractive option when its discount was about 5% wider than BRW, but this opportunity has since diminished [5] IPO Activity - Bill Ackman withdrew the IPO for Pershing Square USA after significantly downsizing the deal, indicating a lack of interest that hindered the transaction [6] - Ackman's previous assertions about the fund trading at a premium were contradicted by market realities, as only 16% of listed CEFs trade at premiums [6][7] Investment Opportunities - Muni CEFs have shown strong performance amid market drawdowns, attributed to lower long-term rates and high-quality profiles, providing a margin of safety [8] - Specific funds such as conditional tender offer funds (MVF) and (EIM), as well as higher-yielding options like NZF, are highlighted as attractive investment opportunities [8]

Core Insights - The article discusses the investment strategy of the MainStay CBRE Global Infrastructure Megatrends Fund (MEGI), which focuses on three megatrend themes: decarbonization, asset modernization, and digital transformation [3][4] - MEGI aims to deliver high total returns with an emphasis on current income, differentiating itself from peers through its thematic orientation [3][4] Investment Themes - Decarbonization constitutes approximately 50% of the portfolio, focusing on global utilities and contracted power businesses [4] - Asset modernization accounts for 35% of the portfolio, investing in toll roads, airports, and midstream energy assets [4] - Digital transformation makes up about 15% of the portfolio, with investments in cell towers and data centers [4] Distribution Policy - MEGI pays monthly distributions of $0.125 per share, annualized to $1.50, utilizing a managed distribution policy that includes realized capital gains [5] - The fund increased its distribution by 15% in July of the previous year, reflecting consistent earnings and income growth [5] Market Outlook - The listed infrastructure market is believed to have bottomed in October 2023, with a constructive outlook for the asset class [6] - Earnings for infrastructure companies are expected to grow by 8% next year, surpassing the long-term average of 6% [6] Energy Demand Trends - A significant increase in global energy demand is anticipated, with U.S. electricity demand projected to rise by 188% by 2030 [6] - Data centers are expected to grow from 2.5% to 7% of overall electricity demand in the U.S. by 2030, driven by generative AI and electrification [6] Portfolio Positioning - MEGI's portfolio consists of 64 positions, with 88% in common equity and 12% in preferred shares, recently shifting towards more common equity for greater upside potential [7] - Geographically, 51% of the portfolio is in the Americas, 31% in Europe, and 18% in Asia Pacific [7] Strategic Fit in Portfolios - MEGI is positioned as a strong complement to income-focused allocations and other real assets, increasingly funded from broad equity exposures due to attractive valuations [8]

Jacobs Stock Photography Ltd Welcome to another installment of our CEF Market Weekly Review, where we discuss closed-end fund ("CEF") market activity from both the bottom-up - highlighting individual fund news and events - as well as the top-down - providing an overview of the broader market. We also try to provide some historical context as well as the relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the fourth week of July. Be ...

Systematic Income On a weekly basis, it was less unusual. TOTAL CEF WEEKLY VOLUME (Ms shares) 1000 800 600 400 200 7016 2018 7020 2022 702A date Systematic Income MUNICIPAL CEF SECTOR NAV TREND 100 l 8 ද 90 85 80 75 2022.01 2022-11 Q date Systematic Income CEFs which are particularly susceptible to forced deleveraging are those with leverage limits (above and beyond the regulatory ones) as well as those with very high-beta such as MLPs, CLO Equity funds and others. that the NAVs significantly lag the bounce ...