The NAVigator, from the Active Investment Company Alliance (AICA), talks all-weather investing and “excellence beyond indexing” through the use of closed-end funds (CEFs) & business-development companies (BDCs). It will help listeners plot a new and different course to financial success, via the tactical use of securities that mix active management within listed & non-listed structures. Subscribe now to get regular updates on everything you need to know to succeed with CEFs & BDCs.
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John Cole Scott on where closed-end funds stand at mid-year
13:43
13:43
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13:43
John Cole Scott, President of Closed-End Fund Advisors and Chairman of the Active Investment Company Alliance, provides an update on what's been happening with closed-end funds throughout the first half of 2024. He notes that discounts narrowed almost across the board, but yields increased, resulting in positive returns for most asset classes.…
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abrdn’s Akus sees opportunity as healthcare plays ‘catch up’ with the market
12:08
12:08
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Jason Akus, Senior Investment Director and Head of Healthcare Investing at abrdn and manager of the firm’s four closed-end funds covering biotech and healthcare, says that the stock market appears to be broadening out and that healthcare and biotech are both likely to be beneficiaries. Healthcare stocks have generally lagged the stock market since …
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CION's Gatto: Money rushing into BDCs creates middle-market opportunities
13:22
13:22
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13:22
Mark Gatto, Co-Founder and Co-Chief Executive Officer of CION Investment Group — which manages the business development company CION Investment Corp. — discusses the heavy interest and cash flow into BDCs and how that is changing the space and making it important for investors and advisers to "pull back the layers to understand what they are invest…
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Picking between funds is about much more than big yields
12:41
12:41
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12:41
John Cole Scott, President of Closed-End Fund Advisors and Chairman of the Active Investment Company Alliance, compares two high-yielding offerings from Ares, breaking down the Ares Dynamic Credit Allocation (ARDC) fund and the CION Ares Diversified Credit I (CADUX) fund. He shows that while both could be viable and attractive options for investors…
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John Cole Scott on BDCs vs. private credit funds, AI impacting money management, and more
11:50
11:50
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11:50
John Cole Scott, President of Closed-End Fund Advisors and Chairman of the Active Investment Company Alliance, shares takeaways from a recent industry conference focused on business development companies (BDCs). He talks about how BDCs compare to private credit funds, how the market is changing, and how some money managers are using artificial inte…
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VettaFi's Islam on the highs and lows of applying rules to CEF investing
9:24
9:24
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9:24
Roxanna Islam, Head of Sector and Industry Research at VettaFi, discusses the benefits and flaws of applying rules-based investing to closed-end funds. She notes that changes in the industry have forced changes on a rules-guided index of closed-end funds created by VettaFi, and how that is impacting the holdings and asset allocation of the fund-of-…
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When the industry tries to narrow discounts, 'that's good for all of us'
11:41
11:41
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11:41
Rob Shaker, Portfolio Manager at Shaker Financial Services, says that economic conditions — the debt-ceiling debate, troubled banks, higher interest rates and persistent inflation — have created a situation where the market isn’t climbing the proverbial wall of worry, but rather a ‘Wall of Meh.’ However, he adds that there is opportunity in the uni…
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Nuveen's Dave Lamb on how fund firms are reacting to increased activism
13:23
13:23
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13:23
Dave Lamb, Head of Closed-End Funds at Nuveen, says there is a "much more aggressive form of activism today than what we saw years ago," and notes that it's driven entirely by discount-arbitrage opportunities rather than whether a fund is underperforming due to management decision-making. With discounts at wide levels — particularly for fixed-incom…
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John Cole Scott on new trends reshaping closed-end funds
13:31
13:31
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13:31
John Cole Scott, President of Closed-End Fund Advisors and Chairman of the Active Investment Company Alliance, talks about the good and bad in recent industry developments. For example, Scott discusses how fund sponsors are taking steps to keep a lid on discounts, potentially reducing a fund's attractiveness to activist investors. He also highlight…
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BlackRock's Minar on how the firm is changing discount plays
12:52
12:52
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12:52
Stephen Minar, Managing Director and Head of Closed-End Funds at BlackRock, discusses a contemporary conundrum in the closed-end fund industry: How discounts drive money flows into closed-end funds but also attract activist investors whose actions may be harmful to long-term individual investors. To address this, Minar notes that BlackRock has laun…
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Sizemore: "The Fed's actions have changed, but the discounts remain"
13:12
13:12
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13:12
Charles Lewis Sizemore, chief investment officer at Sizemore Capital Management, says that while short-term rates are as high as they are likely to be, the "massive discount" created in closed-end funds while rates were on the rise have not dissipated. That means closed-end funds remain a compelling value now, and Sizemore said he is finding partic…
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Angel Oak's Triick says mortgages are in a fixed-income sweet spot now
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13:00
Clayton Triick, Head of Portfolio Management, Public Strategies at Angel Oak Capital Advisors — part of the team running the Angel Oak Strategic Credit Fund — says that fundamentals and valuations seldom get aligned the way they have right now for the U.S. housing market and American homeowners. He notes that valuations are "cheaper than they shoul…
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Liberty Street's Munafo on opportunities in late-stage private venture
14:03
14:03
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Christian Munafo, Chief Investment Officer at Liberty Street Advisors, which runs the Private Shares Fund, discusses how late-stage private venture companies are generating a huge chunk of economic power off most investors' radar. He says now is the time for many investors to pursue the opportunity, coming off of two years in which private shares s…
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Abrdn's Mondillo: Record discounts plus solid yields should pay off for muni investors
10:59
10:59
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10:59
Jonathan Mondillo, head of North American fixed income for abrdn says that record discount levels for municipal bond closed-end funds, coupled with attractive yields on those funds, are creating real opportunities for investors, though he warns about the middle of the yield curve, noting that the most compelling values are at the two ends of the ba…
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John Cole Scott gives his first take on 2024
12:32
12:32
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12:32
John Cole Scott, President of Closed-End Fund Advisors and Chairman of the Active Investment Company Alliance, drills into the first-quarter data for closed-end funds. He notes that while municipal-bond funds still couldn't break out of their long-running slump, the first three months were a strong time for most closed-end funds (more than 90 perce…
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Sit's Doty says meaningful rate cuts aren't coming until 2025
13:24
13:24
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13:24
Bryce Doty, Senior Portfolio Manager at Sit Investment Associates, says the uptick in inflation is not enough to overwhelm the yields investors are earning, noting that real returns may be better than ever. He says investors should enjoy collecting the high yields while interest rates remain high, and while total returns should improve once cuts st…
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Allspring's de Silva says U.S. still has the world's best income opportunities
10:31
10:31
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10:31
Harin de Silva, manager of the Allspring Global Dividend Opportunity fund, says that the U.S. markets have remained among the best income-generating investment opportunities when it comes to the yields being generated relative to the risks being taken. While he favors a global allocation, de Silva noted that the fund has a surprising tilt toward th…
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What struggles in the BDC market portend in a changing rate cycle
9:18
9:18
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9:18
Nicholas Marshi, editor at the BDC Reporter, talks about the struggles business development companies (BDCs) had at the end of 2023, saying he was shocked to see that more than a third of the BDCs his publication tracks were "performing below ... reasonable expectations regarding their key metrics." He says that troubles tend to spiral for a few qu…
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Axel Merk on the broader impact of an activist investor's approach
14:54
14:54
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14:54
Axel Merk, chief investment officer of the ASA Gold and Precious Metals, discusses the impact that Saba Capital Management is having on the fund and on shareholders as it entered the fund as an activist, moving to change the board as it pushes for a double-digit discount to be narrowed. Merk discusses the challenge of dealing with activist investor…
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abrdn's Omstead says the recent healthcare rally is just a start
11:35
11:35
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11:35
Dan Omstead, global head of health care investments at abrdn -- part of the team running the firm's Healthcare Investors, Life Science Investors, Healthcare Opportunities and World Healthcare funds -- says that after several years of struggling, the recent rally in health care and biotech is significant, the start of a positive trend that should be…
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Tough times for commercial real estate are making debt deals attractive
11:09
11:09
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11:09
Cory Johnson, chief executive officer at Pender Capital -- which runs the Pender Capital Real Estate Credit Fund, a closed-end debt interval fund -- says that there's "an abundance of very interesting opportunities" as the commercial real estate market goes through big changes as regional banks pull back from the sector and reduce liquidity for bor…
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Calamos' Kaufman on launching a new ETF of closed-end funds now
13:17
13:17
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13:17
Matt Kaufman, head of ETFs at Calamos Investments, says that years of experience running separately managed accounts of closed-end funds plus the firm's experience running closed-end funds -- as well as an investment environment where a fund that focuses on discounts had lots of investment prospects -- were part of the firm's thinking behind its ne…
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Examining BDCs and muni funds, and deciding between the two
9:49
9:49
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9:49
John Cole Scott, president of Closed-End Fund Advisors -- chairman of the Active Investment Company Alliance -- looks at two asset classes that investors are turning to now for yields. While business development companies and municipal bond closed-end funds have low correlation, investors are looking at both asset types in order to raise yield leve…
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Regulatory capital relief securities add yield, diversification to banking portfolios
10:39
10:39
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10:39
Dana Staggs, president of ArrowMark Financial Corp. -- a non-diversified, closed-end fund that trades under ticker symbol BANX -- talks about why the fund has changed in recent years to where 87 percent of its holdings are now in regulatory capital relief securities, and what that esoteric asset can add to a diversified portfolio. Staggs also discu…
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abrdn's Mondillo: Downtrodden muni funds now represent a big opportunity
10:14
10:14
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10:14
Jonathan Mondillo, head of North American fixed income for abrdn, says the municipal bond market has been looking at a "teacup inversion," and as that changes when the Federal Reserve cuts rates later this year, it should set up well for a barbell approach, with the bargains and values being at the short and long ends of the curve. He notes that th…
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SCG's Merrill on how derivatives mitigate risk and goose equity returns.
11:12
11:12
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11:12
Ian Merrill, president of SCG Asset Management -- which runs The Alternative Strategies Income Fund, a continuously offered closed-end interval fund -- says that investors can change the risk-reward picture in equities by using derivatives to reduce risk but also set up the potential for higher income. He suggests that using derivatives allow a cla…
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VettaFi's Islam on the ETFs that are buying closed-end funds
10:58
10:58
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10:58
Roxanna Islam, head of sector and industry research at VettaFi, digs into the active and passive exchange-traded funds that invest in closed-end funds, looking at the choices, the new funds and the options investors have for buying ready-made portfolios of closed-end funds thanks to the simplicity of ETFs versus the chores of building their own por…
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Angel Oak's Pate sees opportunities in banking as rate cycle pivots
10:33
10:33
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10:33
Cheryl Pate, senior portfolio manager at Angel Oak Capital and manager of the Angel Oak Financial Strategies Income Term Trust, says that 2024 "will bring a still somewhat tough operating environment for the banks but net interest margins are abating, valuations are cheap and [mergers and acquisitions] activity should accelerate from here." That gi…
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CAIA's Filbeck on 'taking the alternative out of alternatives'
12:54
12:54
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Aaron Filbeck, managing director at the CAIA Association -- industry association for Chartered Alternative Investment Analysts -- says that the evolution of alternatives over the last few decades has made it to where it's naive for investors to effectively lump the wide range of investment options under the simple label of "alternatives." Filbeck, …
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2024 look-ahead: John Cole Scott on what the new year holds for closed-end funds
14:23
14:23
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14:23
John Cole Scott, president of Closed-End Fund Advisors -- chairman of the Active Investment Company Alliance -- does his annual forecast for the year ahead, noting that he expects closed-end funds to outperform the general equity markets, and he expects a mild narrowing of discounts from current average levels of roughly 7 percent, noting that bond…
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2023 Year in Review: Closed-end funds bounce back, but leave room for more
13:33
13:33
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John Cole Scott - president of Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance - looks back at how the closed-end fund industry bounced back from the challenges of a terrible year in 2022, and how his forecasts from a year ago played out. He came out on the winning side of the ledger in his forecasts, but especia…
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Nuveen's Langenfeld: 'A timely opportunity' to invest in preferred securities
10:43
10:43
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10:43
Brenda Langenfeld, lead portfolio manager for the Nuveen Preferred and Income Opportunities Fund and the Nuveen Variable Rate Preferred and Income Fund, says that conditions are favorable on a number of different levels, setting up preferred securities for a strong year ahead as interest rates move lower in the year ahead. She noted that heightened…
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Thornburg's Sparkman lengthens maturities and leans international now
9:46
9:46
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Adam Sparkman, client portfolio manager at Thornburg -- part of the team running TBLD, the Thornburg Income Builder Opportunity Trust -- says that current market conditions favor the flexibility of a multi-asset approach, noting that "it's a different menu within fixed income entering 2024 than it was a couple of years ago." The changes in the rate…
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Abrdn's Taggart says discounts are 'overplayed'
10:28
10:28
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10:28
Mike Taggart, closed-end fund specialist at abrdn, says that the overwhelming majority of closed-end funds were created to generate income -- and built with that in mind -- but that the sector gets a lot of its attention as the result of discounts, and he feels the discount angle is "overplayed," because the investor who focuses on the income gets …
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ASA Gold's Merk on how precious metals will respond in a coming recession
10:26
10:26
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Axel Merk, chief investment officer for the ASA Gold and Precious Metals fund, says that gold prices are most tightly correlated to "the confidence the market has in the central bank to manage inflation over time," so gold's rally over the last six weeks -- as well as its path forward -- is "favorable because we might be entering a recession, most …
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Let's go Black Friday discount shopping with John Cole Scott
12:45
12:45
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John Cole Scott, president of Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, tackles the biggest shopping day of the year closed-end fund style, talking about where discounts stand in general for the industry, but also hunting for year-end bargains and looking at three cases to determine whether the Black Frida…
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Sit Invest's Doty on muni-bond discounts and how they will be trimmed
11:33
11:33
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11:33
Bryce Doty, senior portfolio manager at Sit Investment Associates, says that muni-bond closed-end funds using leverage -- where the cost of their borrowings are effectively wiping out returns given current conditions -- are more interested in keeping fees high than making money for shareholders, which is one reason why his firm has become a more ac…
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Abrdn's Purington: Exxon, Chevron deals will trigger an infrastructure merger wave
11:42
11:42
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11:42
Eric Purington, portfolio manager for the Aberdeen Global Infrastructure Income Fund, says that two mega-mergers outside of the infrastructure space -- deals involving upstream energy giants Exxon and Chevron -- have a lot of implications for middle-market/midstream energy companies and infrastructure stocks. Purington says that the larger energy c…
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XA's Perry looks at the boom in non-listed funds
10:56
10:56
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10:56
Steven Perry, vice president at XA Investments, discusses the surge in activity and creation for non-listed closed-end funds, covering why money managers, including a number of prominent sponsors who have never been in the space before, are turning to the products now and how investors can use the new issues to access additional asset classes.…
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Angel Oak's Pate: Bank debt should 'outperform in the current environment'
12:11
12:11
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Cheryl Pate, senior portfolio manager at Angel Oak Capital -- co-manager of the Angel Oak Financial Strategies Income Term Trust (FINS) -- says the banking industry's wild ride since the failure of Silicon Valley Bank in March has created "a market dislocation" in pricing for bank equities and debt, which has created a strong opportunity for bank d…
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John Cole Scott reviews a rough quarter for closed-end funds
14:30
14:30
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John Cole Scott, president of Closed-End Fund Advisors -- the chairman of the Active Investment Company Alliance -- digs into his data to give a recap of the third quarter for the closed-end fund industry, noting that municipal bond funds and REIT funds particularly took it on the chin, with the entire categories being down during the period by 10 …
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VettaFi's Islam on the struggles/potential of ETFs buying closed-end funds
9:33
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Roxanna Islam, head of sector and industry research at VettaFi, says that cautious retail investors have been looking for safety and yield and that while closed-end funds have traditionally filled that bill, investors in ETFs that buy closed-end funds have been avoiding a lot of the struggles by turning elsewhere to invest. She believes that could …
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Calamos' Bush: Tough conditions for closed-end funds to stand out, excel
11:57
11:57
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11:57
Robert Bush, director of closed-end products at Calamos Investments, says that with risk-free money from bank accounts and Treasury bonds at high levels -- and with leverage costs up in response to those higher rates -- investors can have a lot of choices for good income without ever considering closed-end funds. But with the average closed-end fun…
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Blue Bay's Farley: Rate turmoil is making opportunities in event-driven credit
11:34
11:34
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Duncan Farley, portfolio manager for BlueBay Asset Management -- manager of the BlueBay Destra International Event-Driven Credit Fund -- says that the rising cost of capital for businesses and interest rates that are staying higher for longer is creating more "special situations" opportunities and that it's not too late for investors to take advant…
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Muni discounts keep defying gravity; sizing up fixed-income risk and more
12:50
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John Cole Scott, president of Closed-End Fund Advisors -- and the chairman of the Active Investment Company Alliance -- returns to The NAVigator noting that the discounts on muni funds have continued to get wider. He notes that the average discount for a closed-end muni fund stands now at 12.5 percent compared to their 10-year average of just under…
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Angel Oak's McBurnette on opportunities in housing, mortgages
9:44
9:44
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Colin McBurnette, senior portfolio manager at the Angel Oak Funds, says that while high-rate and high-inflationary conditions have made a lot of investors worry about the housing market, those conditions -- along with wide spreads and low housing stocks creating an imbalance in the supply-and-demand dynamic -- have created real opportunities in the…
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Oppenheimer's Penn: BDCs have adjusted to higher default risks
11:06
11:06
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11:06
Mitchel Penn, managing director of equity research at Oppenheimer and Co., says that higher interest rates and stubborn inflation have impacted business development companies in terms of both defaults and leverage, but he notes that BDC executives have taken steps to minimize the impacts. Moreover, current conditions should have BDCs primed for bet…
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Four classic closed-end funds that remain relevant and vibrant today
11:21
11:21
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Veteran money manager David Tepper, president of Tepper Capital Management, looks at four of the oldest closed-end funds -- Adams Diversified Equity, Central Securities, General American Investors and Tri-Continental -- that he has owned for decades, but which remain relevant and effective today, and which are trading at attractive discounts now.…
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40 closed-end funds, a million ways to build a portfolio
12:07
12:07
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John Cole Scott, president, Closed-End Fund Advisors -- chairman of the Active Investment Company Alliance -- discusses portfolio construction and the many factors that go into a diversified safe and solid separately managed account with closed-end funds and business-development companies as the primary focus. He details a diversified tax-sensitive…
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NAVigator bonus: Discounts are at widest levels in years, hunker down and buy
12:57
12:57
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12:57
In a bonus episode of The NAVigator, John Cole Scott, president of Closed-End Fund Advisors and the chairman of the Active Investment Company Alliance, discusses the historic level of deep discounts he is seeing in closed-end funds, and how that translates to buying opportunities now. Closed-end funds have seldom seen bigger discounts in the last q…
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