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The first actively managed ETFs to invest in CEFs

heezsafe
in Fund Discussions
Surprise, surprise, surprise..... only a matter of time..... the first actively managed ETFs that will invest primarily in CEFs.
http://www.businesswire.com/news/home/20160928005849/en/Trust-Launches-Trust-CEF-Income-Opportunity-ETFs
First Trust Advisors L.P. (“First Trust”) has launched two new exchange-traded funds (“ETFs”) that invest primarily in closed-end funds (“CEFs”), the First Trust CEF Income Opportunity ETF (Nasdaq: FCEF), and the First Trust Municipal CEF Income Opportunity ETF (Nasdaq: MCEF). Both funds seek to provide income by investing primarily in CEFs. FCEF has a secondary objective of total return. Furthermore, MCEF invests primarily in CEFs that invest in municipal debt securities and will seek to provide income that is exempt from regular federal income tax.
Ken Fincher will be the PM responsible for the day-to-day management of each fund’s investment portfolio.

Comments

  • AndyJ
    edited September 2016
    Now they just have to get popular enough to work up to a decent trading volume - something the "inactive" XMPT hasn't been able to do -- altho it has been trending a bit higher lately.
  • BenWPBenWP
    Not exactly the same animal, but RIV from RiverNorth has been operating since last December as a CEF of CEFs. Presently it trades at about a 2.7% discount. RIV can hold ETFs, but it does not seem to now. NAV has risen about 6%, but the price only 1%. While M* estimates the distribution rate at 8.5%, most of what the fund has paid out is in ST and LT CG, and some income.
  • heezsafe
    These will be expensive puppies, due to indirect/acquired expenses from the underlying:
    http://www.etf.com/sections/daily-etf-watch/etf-watch-first-trust-adds-2-closed-end-funds

    And, once again, we shall undoubtedly see a mismatch, perhaps quite a bit, in liquidity of the investment vehicle vs. its underlying constituents. And, someday, there may be "a reckoning", because of this?
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