What to Tell Clients About Closed-End Funds in a Rising Rate Environment
By: Anne W. Kritzmire - September 01, 2017
The marketplace has historically viewed closed-end funds cautiously as rates start to rise, often causing CEFs to temporarily trade at discounts (or widen discounts) to their net asset values (NAVs). Fixed income strategies, in particular, have been most affected. However, a look at both historical data and the various income-generating levers that CEFs are uniquely equipped with shows they are far more resilient and rate-agnostic than their reputation.