Weekly CEF Report — WoW Comparison
Executive summary
This week saw several discounts widen (UTG, AIO, EOS, NBXG) while a handful of funds tightened (ERH, UTF, PCN compressed from a very high premium). The largest week moves are price-driven rather than NAV collapses — so many moves appear technical; verify corporate-action (ATM/rights) status before trading.
Biggest premium/discount moves (numeric delta = change in Current P/D)
Largest wideners (discount grew / premium faded)
- AIO: -7.23% (this) vs -4.72% (last) > widened –2.51 pts
Comment: share weakness outpaced NAV; watchdog for sentiment-driven selling.
- UTG: -3.47% vs -0.02% > widened –3.45 pts
Comment: meaningful move — NAV largely intact; check for technical selling or funds flows.
- EOS: -4.65% vs -2.56% > widened –2.09 pts
Comment: premium appetite cooled quickly.
- NBXG: -12.42% vs -11.63% > widened –0.79 pts
Comment: deeper discount — illiquidity risk remains.
- RNP: +0.51% vs +2.12% > premium compressed –1.61 pts
Largest tighteners (discount compressed / premium increased) - ERH: -7.12% vs -8.85% > tightened +1.73 pts
Comment: utilities income demand returning — momentum improving.
- UTF: -7.44% vs -8.55% > tightened +1.11 pts
Comment: moved off deeper discount; still cheap vs many peers.
- PCN: +9.93% vs +12.51% > premium compressed –2.58 pts (from very rich to still rich)
Comment: premium gave back significant ground — reduces immediate premium risk but still expensive.
- STK: -4.54% vs -5.11% > tightened +0.57 pts
Net theme: Discount widening was heavier among a cluster of utility / income names (AIO, UTG, EOS) while some high-premium funds compressed back (PCN, RNP).
Z-stat shifts (1-yr Z; notable moves) - AIO 1-yr Z: moved from -2.17 > -2.69 (became more oversold; delta ˜ -0.52).
- UTF 1-yr Z: improved slightly (less negative) vs prior week — signals partial mean reversion.
- ERH 1-yr Z: moved higher (from negative to less negative / toward neutral) — consistent with premium tightening.
- NBXG / UTG: remain large negative 1-yr Z readings (still among the most oversold in the group).
Interpretation: Z-stat moves are generally consistent with the P/D changes — funds that widened discounts became more negative on Z; funds that tightened improved.
NAV vs Price divergence — where NAVs hold while prices fell - UTG: NAV still firm; share price slide is the main driver of the wider discount — technical sell pressure suspected. Action: check for flow/ETF rebalances and rights/ATM notices.
- AIO: similar pattern — NAV stable, share underperformance increased discount.
- NBXG: NAV reasonable but share price lagging — illiquidity + deep discount risk.
- PCN: share price pulled back from premium highs — NAV didn’t drop proportionately, hence premium compressed (less immediate downside risk than if NAV fell).
Tactical Watchlist & Suggested Actions (quick) - Buy (scale in, DCA):
- UTG — statistical oversold and NAV support; start small and average down. Verify no corporate action.
- CSQ — deep-ish discount, decent 1-yr Z; good tactical income diversifier.
- Cautious / Monitor:
- UTF — attractive if corporate-action risk is clear; consider starter position.
- ERH — showing momentum; add on confirmation of continued discount compression or on small pullbacks.
- Trim / Avoid:
- PCN — still at a high premium despite compression; avoid initiating new large buys.
Quick weekly scoreboard (high level) - Most oversold (1-yr Z this week): NBXG, UTG, AIO, CSQ.
- Largest P/D widening: UTG (–3.45 pts), AIO (–2.51 pts), EOS (–2.09 pts).
- Largest P/D tightening: PCN (premium gave back ~2.58 pts), ERH (+1.73 pts), UTF (+1.11 pts).
Short takeaways for the board (tweet-length) - “Discounts widened this week in several utility/income names (UTG, AIO, EOS). ERH and UTF showed compression. Consider scaling into oversold UTG/CSQ but confirm no ATM/rights before adding. Avoid chasing PCN’s premium.”
Standard disclaimer: This summary is informational only and not investment advice. Use your own due diligence (distribution coverage, SEC filings, corporate action notices) and consult a licensed advisor before trading. |
