ETF Chart of the Day: Closed End Chatter

Back in 2010 we covered the launch and early progress of PCEF (PowerShares CEF Income Composite Portfolio, Expense Ratio 0.50%) which was a rather unique offering in the ETF space in that it provided exposure to an index of closed-end funds.

Nearly four years later, PCEF has gathered $467 million in assets under management, and it seems to appeal to those institutional managers and registered investment advisors that have traditionally built portfolios out of individually listed closed end funds.

Additionally, the desire for current income, for closed-end funds individually often attract investors whom are looking for regular dividend income, has helped propel this “Closed End” fund category within the greater ETP
space. PCEF is not alone in the category at this point, as Van Eck offers XMPT (Market Vectors CEF Municipal Income, Expense Ratio 1.67%) which also tracks and index made up of individually listed CEFs, but this fund has only managed to gather about $25 million since its 2011 inception.

GCE (Goldman Sachs Claymore CEF GS Connect ETN, Expense Ratio 0.95%) has been on the market since 2007 but the fund remains small, having only raised $3.5 million in AUM since inception.

In a sign that the industry believes that Closed End funds delivered in index managed ETP form will continue to grow in popularity, 2013 saw the launch of two new CEF dedicated funds in YYY (YieldShares High Income, Expense Ratio 1.65% and CEFL (ETRACS Monthly Pay 2X Leveraged Closed End Fund ETN, Expense Ratio 0.50%)