PCEF ETF

The Invesco CEF Income Composite ETF holds 112 closed-end funds, mostly invested in U.S. stocks and bonds. Its total expense ratio is about 3% and its aggregate discount isn't very attractive. PCEF has suffered inflation-adjusted decay in both capital and income.

For income-seeking investors, closed-end funds (CEFs) offer relatively high distributions and the potential to buy these shares at a discount to the fund's NAV. But these are lesser known fund structures.

Closed-end funds (CEFs) are an intriguing investment choice with a fixed number of shares that can be traded on stock markets. The Invesco CEF Income Composite ETF is a fund that invests in a variety of CEFs to diversify its portfolio. PCEF holds a wide range of assets, with an almost equal distribution between stocks and bonds, and currently offers a yield of approximately 9.59%.

Invesco CEF Income Composite ETF is based on the S-Network Composite Closed-End Fund Index and focuses on producing attractive yields. PCEF charges a high total expense ratio of about 3% due to fees of the underlying funds held. PCEF's performance has been disappointing with annualized returns of 6% over the long run, and there are better performing alternatives available at significant discounts to NAV.

Invesco CEF Income Composite ETF is an "ETF of CEFs" that tracks a basket of income-focused closed-end funds. The fund offers a 10% yield through a monthly distribution. We see the macro backdrop as positive for this unique market segment going forward.

Invesco CEF Income Composite ETF is a fund of funds with 114 holdings and a 12-month distribution yield of 9.97%. PCEF's performance has lagged behind its competitor CEFS and has experienced a downtrend in both price and distribution. PCEF may not be a good long-term investment for preserving income and capital, but it may be useful for tactical allocation and swing trading.

The Invesco CEF Income Composite ETF (PCEF) is an aggregator of closed-end funds (CEFs) and has a high 30-day SEC yield of 8.85%. PCEF's performance is driven by the underlying funds' risk factors and their discounts to NAV, with a beta to risk-off events. The author believes the current market rally is unsustainable and recommends selling PCEF now to pick it up 15% lower later in the year.