Preferred Stock of Closed End Funds (CEFs)

Preferred stocks of closed end funds (CEFs) tend to be some of the safest preferred stock in existence. This is because of the requirements that the CEF have at least 200% asset coverage of “senior securities” which means debt and preferred stocks.

As you can see in the chart below MOST of the issues are solidly investment grade.

It is CAUTIONED that all but 6 of these issues are perpetual preferreds meaning they are sensitive to interest rate movements.

In this case safety of the security doesn’t mean safety of the share price. While the shares are extremely safe the share PRICE can be decimated if interest rates move strongly higher.

We note that BDC’s are organized as closed end funds, but we do NOT include them here.

We note that the issue from Kayne Anderson and those from Oxford Lane and RiverNorth are term preferreds thus they have mandatory redemption dates.

A click on the ticker symbol takes you to the issue detail page.

The few issues highlighted in Grey are Month Payers.

Asset coverage is calculated by dividing total assets by total preferred stock liquidation value

** in the Asset Coverage column indicates debt and preferred leverage

CLICK THE TAB AT THE TOP OF THE LIST TO SORT BY ALPHA OR BY CURRENT YIELD

Dividends paid by preferred stocks of closed end funds may be qualified or may not be. Many times they will include a return of capital. If this is important to you go to the CEF website and check the most recent tax data that they will have available. There are no hard and fast rules as to whether the dividend is qualified.

5 thoughts on “Preferred Stock of Closed End Funds (CEFs)”

  1. Thanks for the list, Tim…. I’ve been meaning to review this category myself, so now I’ve got a starting point…. I think there ought to be a subcategory in your list for those preferreds that will and do ACT as if they are term preferreds because of the existence of various puts as have been discussed at various times on this site… That would include GGO-A, GLU-B, GDL-C, and maybe others…. I’ll also mention you overlooked one as a term preferred, SPE-B. Prospectus says “In addition to the foregoing, all outstanding shares of Convertible Preferred Stock as of August 19, 2021 (five years from the Expiration Date) will be mandatorily redeemed at a price of $25.00 per share of Convertible Preferred Stock held on such date.” p.12.

    1. Hi 2wr–yes SPE-B is on the list. I may just ‘filet’ out some of the special ones you mention.

      1. Then the number in your CAUTION regarding issues that are not perpetuals should be 7, not 6…. yeah I know, just what you need, a pesky nit-picker……. lol

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