Resilient CEFs Through October

The market has behaved with a lot of anxiety through October with the SPX selling off sharply a number of different days.

One way we gauge CEF resilience is simply by looking at funds which have managed flat or positive NAV returns on down SPX days.

The chart below captures this by averaging NAV performance across three significant down days in October and sorting for the highest average NAV return on those days.

What we see is that there are a number of usual suspects such as Muni and Investment-grade funds but also Mortgage funds as well as EM Debt. Though we wouldn’t expect these two sectors to withstand a sharp correction it’s clear that they can provide some diversification due to their more idiosyncratic stance.