CEFS ETF

Saba Capital's expertise in closed-end funds and activist approach leads to outperformance vs. peers, unlocking value in underlying funds. The Saba Closed-End Funds ETF delivers a consistent monthly income yielding 7.9% with upside from capital appreciation. The CEFS fund is highly diversified with over 1,000 positions across stocks, bonds, and commodities, making it suitable for buy-and-hold strategies.

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Saba Closed-End Funds ETF is managed by activist hedge fund Saba Capital, known for focusing on closed-end funds. Recent success with the New America High Income Fund resulted in a significant +7% price gain on August 9, 2024. Saba Capital's expertise in closed-end funds is reflected in the performance of their ETF.

Saba Closed-End Funds ETF aims to generate excess returns by investing in closed-end funds trading discounted to their net asset value. The CEFS ETF is managed by Saba Capital Management, founded by Boaz Weinstein, and owns over 100 closed-end funds. The fund offers diversification across asset classes and investment managers, with a focus on equities, and has a high expense ratio of 5.81%.

We examine the pattern of the ongoing CEF sell-off, which mirrors past occurrences. Equity funds are declining more than fixed-income funds, leveraged funds are underperforming, and discounts are widening. As longer-term rates increase, longer-duration assets may offer more appeal, and investors should consider incorporating them into their portfolios.

Saba Closed-End Funds ETF is an actively managed ETF of closed-end funds with a distribution rate of 8.53% and a portfolio of 98 CEFs. The fund has a flexible investment strategy but lacks transparency, combining fundamental and quantitative analysis. The fund has outperformed its competitors since inception, but the price and distributions have remained flat, resulting in a decay of inflation-adjusted value for shareholders.

Invesco CEF Income Composite ETF offers diversified exposure to income-producing closed-end funds with a strong 10.1% yield. Saba Closed-End Funds ETF has a stronger performance track record, due to savvy investment decisions and activist campaigns, making it my preferred choice over PCEF. An overview of PCEF, and a comparison to CEFS, follows.

Saba Capital, founded by Boaz Weinstein, has won industry awards and focuses on activism to close discounts in closed-end funds. The Saba Closed-End Funds ETF aims to generate high income and currently yields around 9%. CEFS has a history of solid positive returns and should outperform similar products in the future due to their very active approach.

Cohen & Steers Closed-End Opportunity Fund takes a fund of closed-end funds approach, offering significant diversification. FOF is currently trading at a fairly elevated premium, which is unusual in looking at its history and indicates it is overvalued. Saba Closed-End Funds ETF could be a potential alternative for investors, as shares can be picked up at NAV while waiting for a better entry level for FOF.