First Quarter 2023 Overview

After a positive fourth quarter of 2022 which saw the average closed-end fund (CEF) post a total return of +6.4%, CEFs continued their positive momentum in 1Q23 and rose on average +3.4%. It was a broad rally with total returns of +4.2% for equity CEFs, +3.0% for fixed-income CEFs, +2.7% for municipal CEFs, and +3.2% for taxable fixed-income CEFs. Every category tracked by Morningstar was positive during 1Q23 except for California state specific municipal CEFs (-1.7%) and preferred CEFs (-2.7%). (Source: Morningstar. All data is share price total return) 

Equity CEFs benefitted from a +7.5% total return for the S&P 500 Index and a +7.0% total return from the MSCI ACWI ex USA Index for 1Q23. Fixed-income CEFs benefitted from positive total returns from several key fixed-income indices for 1Q23 including a +3.7% for the ICE BofA High Yield Bond Index, a +3.3% return for the Morningstar® LSTA® US Leveraged Loan Index, a +2.6% return for the ICE BofA 7-12 Year US Municipal Securities Index, a +3.0% return for the Bloomberg US Aggregate Bond Index and a +3.0% return for the Bloomberg Global-Aggregate Index. (Source: Bloomberg)

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