Saba Closed-End Funds ETF

CEFS is an actively managed fund-of-funds that seeks to generate high income by investing in closed-end funds trading at a discount to net asset value and hedging for duration risk.

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.

CEFS: Activist Manager Unlocks Value In Closed-End Funds

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Google the words “passive income” with the title in an online search, and you'll get about 437,000 results.

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CARY, CLOZ, and CEFS are three of the strongest income ETFs in the market right now. CARY's diversified, high-quality portfolio is perfect for more risk-averse investors. It has a solid 6.2% yield, and outstanding risk-returns. CEFS is much more aggressive, offering a good 7.8% yield, and strong returns. It is riskier than most.

3 Strong Income ETFs, Yields 6.2% - 8.3%

CEFS is an actively managed ETF run by Saba. The fund sports a strong 8.1% yield and a solid performance track-record. A look at some of its more recent developments follows. These include an activist campaign targeting BlackRock, a booming share price, and a lower yield and discount.

CEFS: Recent Developments

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Volatility in the closed-end fund, or CEF, market has recently increased, while tight discounts create a point of vulnerability for the market. We discuss various strategies investors can use to make their CEF portfolios more resilient to take advantage of future draw-downs. These strategies include focusing on likely CEF distribution changes, seeking funds with wide discounts, considering term CEFs, and riding sidecar with CEF activists.

Ideas For Managing CEF Discount Volatility

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.

CEFS: This Fund Of Funds Has Delivered In 2024, 8% Yield

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We take a look at the trio of Saba's public investment funds. CEFS is a pure-play fund of CEFs, while the CEFs BRW and SABA have allocations to a diverse array of securities, including reinsurance, loans, stocks, SPACs, crypto, etc. SABA will likely transition over time to be similar to BRW - it remains our favored option between the two funds.

8-15% Yield Options In The Saba Fund Suite

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This ETF Edition highlights 12 less covered exchange-traded fund ideas on Seeking Alpha from June 1st - July 15th. ETFs in our first edition include Saba Closed-End Funds, iShares 20+ Year Treasury Bond BuyWrite Strategy, Global X Russell 2000 Covered Call, Invesco S&P 500 GARP, and more. Managed futures are in focus with one ETF idea where the author writes they "offer potential for maximizing income, boosting returns, and reducing volatility in a portfolio".

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We review CEF market valuation and performance through the third week of June and highlight recent market action. CEFs were mixed with widening discounts, but most sectors are up month-to-date, led by munis due to lower Treasury yields. Saba and Invesco reached a standstill agreement for two state Muni CEFs, with a tender offer for 25% of shares at 99% of NAV.

CEF Weekly Review: Saba And Invesco Call Truce (For Now)

Saba Closed-End Funds ETF has put up strong performance since our last update and beat out FOF as expected. CEFS is a leveraged ETF that invests in closed-end funds, providing exposure to activist targets of Saba Capital Management all in one package. CEFS has a solid track record, high distribution yield, and a diversified portfolio of equity, fixed-income, alternatives, and mixed allocation.

CEFS: Remains An Attractive Closed-End Fund Focused 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%.

CEFS: A Unique Closed-End Fund Play

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BIZD, CEFS, and CLOZ are three income ETFs offering investors strong, above-average yields, in the 8.4%-10.5% range. BIZD has the highest yield but is quite risky. CLOZ has the lowest yield, with low realized volatility, but some liquidity risks. CEFS is somewhere in between. All are strong, albeit somewhat risky, choices.

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MDIV is a multi-asset class ETF focusing on income-producing asset classes and securities. The fund's strategy and security selection process have led to underperformance compared to index funds of its underlying asset classes. It pales in comparison to some of its peers, especially CEFS.

Sell MDIV, Buy CEFS

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We take a look at the shape of the current CEF sell-off. The sell-off has followed a similar pattern to previous instances, with equity funds falling more than fixed-income funds, leveraged funds underperforming and discounts widening. Longer-duration assets may become more compelling as longer-term rates rise, and investors should consider adding them to their portfolios.

Dissecting The Current CEF Sell-Off And Opportunities

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.

CEFS: Good Relative To Peers, But Lagging Inflation

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While ETFs are traditionally passive products, active opportunities in the broader ETF market have been growing significantly over the past few years. Active ETFs of CEFs have historically had lower distribution rates than their passive counterparts.

Passive Vs. Active ETFs Of CEFs

Closed-end funds (CEFs) are relatively under the radar compared to peers like exchange-traded funds (ETFs) and mutual funds. Closed-end funds are generally desirable for two reasons: 1) high income; and 2) premium/discount mechanism.

Passive vs. Active ETFs of CEFs

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abrdn, a UK-based fund manager, has been aggressively acquiring and merging closed-end funds aka CEFs from other managers to expand its offerings. CEFs have advantages over traditional dividend-paying stocks and offer a wide range of asset types and classes.

These 7 High-Yield CEFs Reduced Distributions In 2024, Consider Buying Anyway

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.

Consider Selling PCEF And Buying CEFS Instead

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.

CEFS: The Best Closed-End Funds To Buy For 2024

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.

FOF Is Richly Priced, CEFS Could Be An Alternative

The Saba Close-end Funds ETF engages in closed-end fund arbitrage by buying closed-end funds trading at a discount to NAV. Saba is also not afraid to get its hands dirty and engage in activist campaigns to improve funds' performance and close the NAV discounts. The CEFS ETF has delivered strong historical returns compared to passive closed-end fund-of-funds.

CEFS: Investing With Award-Winning Portfolio Managers

Saba Closed-End Funds ETF is a closed-end fund arbitrage strategy that seeks to provide high levels of income. CEFS has a high annual fund operating expense of ~2.9%, significantly higher than the average expense ratio for mutual funds and ETFs. The Fund has underperformed the S&P 500 since its launch in 2017 but has been significantly less volatile.

CEFS: Solid Performance But High Fees

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ETFs Of CEFs: Diversification And Higher Distributions

Saba Closed-End Funds ETF outperforms other closed-end funds ETFs in both falling and rising interest rate environments. CEFS actively manages its portfolio to extract maximum shareholder value, including engaging in closed-end fund arbitrage. CEFS is currently engaged in a battle with BlackRock to switch certain closed-end funds to open end funds, potentially resulting in a gain for shareholders.

News for Saba Closed-End Funds ETF ETF (CEFS)