Equity CEFs: 6 Month NAV and Market Performance Results

Douglas Albo submits: This article looks at the year-to-date and current statistics of most of the equity based high-yielding Closed-End funds available to investors, where high yield is defined as over 6%. These statistics can be quite revealing and in some cases, quite illogical and I will try and point out some of the more glaring inconsistencies at the end of the article, which may give investors opportunities for investment.

By Douglas Albo: If you've read my past articles on high yielding, equity (stock) -based closed-end funds (CEFs) then you know that these funds generally use three different strategies to generate their income that they pass on to investors in the form of high distributions and yields. If you are unfamiliar with how these three income strategies work, you can read up about them here.

By Douglas Albo: About a year ago I suggested that income investors in high yielding equity closed-end funds (CEFs) should start looking at funds which utilized an option-income strategy to generate income for their large distributions as a two-year bull run in the market was likely to give way to a more sideways market period and play more into the hands of funds which utilized an option-income strategy as opposed to other income strategies.

Douglas Albo submits: The accompanying table of equity based Closed End Funds (CEFs) is intended to compare the Net Asset Value (NAV) and yields of these funds since inception so that the reader can determine which funds have best preserved their NAV while maintaining a balanced income and distribution policy. These 46 funds represent the majority of high yielding equity based CEFs available to investors and collectively represent about $29 billion in assets.

By Douglas Albo: One of the first articles I wrote on Seeking Alpha back on January 6, 2011, was titled, "Income Strategies For All Market Seasons" and I believe it was the first article written by any author which discussed the basic income strategies that equity based high yielding Closed-End funds (CEFs) use to generate the income they pass on to investors in the form of high distributions and yields.

By Douglas Albo: The following tables show the top market price and NAV performers Year-To-Date (YTD) of the vast majority of the high yielding (generally 6%+) equity based (50%+ stocks) Closed-End funds (CEFs) available to investors. The perfomance numbers include all distributions added back but not reinvested to give total return performances. For comparison, I have included the total return performances of four of the most popular and most heavily traded index ETFs.

By Douglas Albo: Through 11 months in 2012, the total return market price performances of equity based high yielding Closed-End funds (CEFs) have been pretty good. I wouldn't call it great since many funds continue to trade at low valuations as reflected by their historic premium/discount levels but certainly better than 2011 when most funds closed at their widest discounts since the bear market bottomed in the spring of 2009.

By Douglas Albo: About four months ago on June 7th, I wrote an article called "The High Cost of High Distributions" in which I showed how ultra high yielding equity based closed-end funds (CEFs) which had overly high net asset value (NAV) yields of 12% or higher were, in fact, yield traps for investors and the end result was far in