The NAVigator

Cheryl Pate, senior portfolio manager for the Angel Oak Financial Strategies Income Term Trust, says that community banks stand out as a part of the financial sector that is poised to benefit into 2023, as banks will likely see the bulk of continuing rate hikes fall directly to the bottom line. Even with that boost, however, she favors bank debt right now compared to holding bank stocks, noting th...

Josh Duitz, deputy head of global equities at Abrdn -- portfolio manager for Abrdn Global Infrastructure Income and two of the firm's dynamic dividend funds -- says that the macro drivers for infrastructure -- globalization, upgrades and repairs, urbanization and increased demand -- coupled with current inflationary pressures have created an environment that is solid for recession-resistant infras...

Kenneth Burdon, an attorney in the investment management group at Skadden, Arps, Slate, Meagher & Flom, says the new "control share" statute enacted at the start of August by the state of Delaware should protect should protect investors from activist investors acting like corporate raiders trying to force a pop to net asset value without regard to what the broad group of shareholders is interested...

Roxanna Islam, associate director of research at VettaFi -- which developed the the S-Network Composite Closed-End Fund Index and other benchmarks for the closed-end fund space -- discusses the construction of indexes of closed-end funds and the benefits to using them over individual issues, as well as how passive investing in the space has held up against active management during the rough start...

Bryce Doty, senior portfolio manager at Sit Investment Associates, says that the market's troubles this year have set closed-end funds up to be in a sweet spot, able to generate additional returns that traditional mutual funds and ETFs can't get investing in the same spaces. Despite those potential benefits, Doty acknowledges that most investors shy away from closed-end funds for a lack of underst...

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, discusses some equity and fixed-income funds currently trading at premiums and compares them with similar funds priced at a discount, noting that expenses, payouts and more determine relative values. Further, he notes that when the market takes a dive and discounts wide...

Portfolio manager Tim Ryan of Nuveen -- who runs the Nuveen Dynamic Municipal Opportunities closed-end fund -- says that after a miserable first half of 2022 that lagged Treasury bonds, conditions have stabilized for muni bonds, which now have a more attractive yield curve and offer a better investment opportunity than Treasuries. Ryan says that the first-half selloff was more about technicals tha...

Timothy Reick, chief executive officer at Liberty Street Advisors -- advisor to the Private Shares Fund -- says that private equity is an asset class that is not correlated to the broad stock market, and that individual investors largely overlook its potential role in their portfolios. Reick notes that with private companies waiting much longer both in terms of time in business and the asset size...

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, says that business-development companies -- which are built to handle a four-year business cycle -- are looking at positive surprises as second-quarter earnings season arrives. From July 26 to August 10 -- when the bulk of BDCs will report earnings -- Scott says that BD...

Rob Shaker, portfolio manager at Shaker Financial Services, says that the closed-end fund market showed signs of a "sympathy widening" in mid-June, an event when there is "excessive liquidation selling based on fear," leading to a bad day on  the stock markets and bond closed-end fund discounts widening at the same time. Shaker says it can be a sign of a market bottom, which can lead to a bounce-b...

Ben McCulloch, managing director and general counsel at XA Investments, says that the last five years have seen over $40 billion in growth in interval funds and tender-offer funds, and that interest has attracted more fund sponsors -- including companies that have been heretofore more focused on ETFs -- and more new ideas. That has brought with it increased regulatory scrutiny, as the Securities a...

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, returns to The NAVigator to answer questions frmo listeners, including one on whether it makes sense to do tax-loss selling now rather than waiting for the traditional period for making swaps at the end of the year. Scott recommends closed-end fund investors tap their "...

Larry Holzenthaler, investment strategist and analyst for Nuveen, says that "floating rate loans actually look arguably cheap to us today," acknowledging that it's surprising that the asset class is trading at a  discount "in the middle of one of the most brutal rate-hike campaigns we have ever seen." Holzenthaler -- who also covers the high-yield space -- says that senior loans have been one of t...

In this bonus episode of The NAvigator, Jonathan Browne, director of research at Robinson Capital and portfolio manager of the Robinson Funds talks about how balancing closed-end fund investments with pre-market SPACs [special-purpose acquisition companies] creates opportunities for higher yields with diversification that helps to balance out risks. 

Sam Brothwell, director of research at Energy Income Partners, says that the current cycle of under-investment in capital spending has made it harder for energy producers to respond to the current global supply-demand imbalance; that has pushed energy prices -- for oil, natural gains, electricity and alternatives -- dramatically higher, where they are likely to stay, even as energy companies work...

With the volatility and downward pressure in the market pushing many investors to specialty funds, sector offerings and alternatives, John Cole Scott, chief investment officer at Closed-End Fund Advisors and chairman of the Active Investment Company Alliance returns to the NAVigator this week to talk about some funds that are more basic in strategy, core holdings by nature, and highlights five tha...

Nicholas Marshi, editor of the BDC Reporter, says that business-development companies had a good first-quarter across the board, despite troubles across the broad market. After seven quarters of BDC's generally increasing net asset value per share, and while that growth decelerated during the first three months of 2022, Marshi says it was a "hinge quarter," where inflation, higher interest rates a...

Duncan Farley, portfolio manager for BlueBay Asset Management and co-manager of the Destra International Event Driven Credit Fund, says that today's headlines are driving more companies to distraction and creating the types of problems that he sees as investment opportunities. His fund has taken advantage, posting double-digit gains while most of the market has moved in the opposite direction, and...

Bill Kelly, president of the CAIA Association, discusses the importance -- which he believes is mostly misplaced -- that many investors place on having daily liquidity in their investments, even though they have no intention of touching the money in the short term. The result of these mis-aligned time frames is that investors pay a real price for liquidity they neither want and need; the offshoot ...

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, talks about the search for closed-end funds that can deliver in rising-rate, high-inflation conditions, talks about five issues from different categories that pass muster now, and explains how in today's business-development company space, "Sometimes discounts are expen...

Nathan Shetty, head of multi-asset for Nuveen and co-manager of the Nuveen Multi-Asset Income Fund, discusses the importance of using proper allocations to generate reasonable and consistent total returns in a low-return environment. Shetty notes that proper diversification and risk management are particularly important in times like today, with so many wild cards, headline risks and uncertainties...

Mike Taggart of Taggart Fund Intelligence -- executive director of the Active Investment Company Alliance -- reviews the first-quarter results for closed-end funds, noting that discounts widened out during a rough period for the market, reaching a crossroads where investors are trying to decide now if the discount has hit a level low enough to represent a good risk premium and a buying opportunity...

Bob Long, chief executive officer at Conversus -- which manages the Conversus StepStone Private Markets Fund -- returns to the NAVigator to discuss private equity and how investors looking for success must commit to overcoming the J-curve, the start-up period when private-equity investments tend to lose money in the early days in order to be positioned for long-run success. Individual investors wa...

Steven Bavaria, author of "Inside the Income Factory" on SeekingAlpha.com, says that current market conditions have shown the value of focusing on income streams rather than the value of the underlying securities, allowing investors the peace of mind that comes from generating cash-flow and putting that money back to work buying at a discount. Bavaria noted that when a manufacturing company builds...

Michael Bell, founder of Primark Capital -- which runs the Primark Private Equity Investments Fund, a closed-end interval fund -- discusses how changing market conditions have reduced the number of public companies and dramatically increased the number of available private equity investments, which he says are best handled in the limited-liquidity structure of an interval fund. It creates an oppor...