CEFs have a set number of shares and do not issue more shares as demand grows. Prices are driven by demand, not the NAV.
Joesph LaCorte, President of S-Network, stated that “CEFX is the first index to track the performance of U.S. closed-end funds whose principal investment objectives are to produce taxable and tax advantage yields.”
According to Closed End Fund Index, the Index covers three main CEF sectors:
- Investment-Grade Fixed-Income. CEFs that invest in government securities, corporate bonds, agency bonds and foreign debt securities rated BBB or higher.
- High-Yield Fixed Income. CEFs that invest in corporate, emerging market debt and bank debt rated BBB or lower.
- Option Income. CEFs that invest in equities and write call options on equities and equity indexes.
For more information on new ETFs, visit our new ETF category.
Max Chen contributed to this article.