Lipper Fund Market Insight Reports

The Month in Closed-End Funds: April 2013

lipperclientservices@thomsonreuters.com — Fri, 03 May 2013 00:00:00 -0600

For April only 30% of all closed-end funds (CEFs) traded at a premium, with only 20% of equity funds and 37% of fixed income funds trading in premium territory to their NAVs. None of the Lipper CEF macro-groups traded at a premium at month-end.

For the first month in four all of Lipper's CEF classifications posted returns in the black, with equity and fixed income CEFs rising on average 1.87% and 1.80%, respectively, on a NAV basis.

A late-month flight to safety helped push all municipal bond fund classifications to the plus column, with national municipal debt funds (+1.71%) slightly underperforming their single-state municipal bond fund (+1.75%) brethren.

Benefitting from a weakening U.S. dollar and a massive stimulus program by Japan, both the World Equity CEFs (+2.14%) and World Income CEFs (+2.55%) macro-groups rose to the top of their respective universes.

Sovereigns Hurt, but Corporates Hang On

Thu, 04 Apr 2013 00:00:00 -0600

The risk trade persisted in the U.S. as High Yield Funds spiked 2.74% for Q1 and Loan Participation Funds—the quarter’s top draw in terms of bond fund flows—held up its end of the bargain by gaining 2.20%.

Treasuries sold off, sending General US Treasury Funds down 0.80%, TIPS Funds down 0.35%, and General US Government Funds down 0.29%.

Corporate debt did well, with the A-Rated and BBB-Rated Funds groups up 0.23% and 0.36%, respectively.

Sovereign debt took it on the chin for Q1 as International Income Funds dropped 1.91%—the worst showing in the fixed income universe.

The Month in Closed-End Funds: March 2013

lipperclientservices@thomsonreuters.com — Wed, 03 Apr 2013 00:00:00 -0600

For March only 34% of all closed-end funds (CEFs) traded at a premium. Only the taxable bond CEF macro-group traded at a premium (0.98%), with 40% of all fixed income CEFs trading in premium territory at month-end.

For March all but one of Lipper's taxable bond fund classifications posted plus-side returns, with Emerging Markets Debt Funds (-0.81%) posting the only return in the red.

With the talk of municipal bond funds losing their tax-exempt status during the upcoming budget negotiations and the risk of underfunded state pension plans putting undue pressure on state coffers, none of Lipper's ten municipal debt CEF classifications posted a positive NAV-based return for March.

Succumbing to some of the overseas pressures during the month, 2 of Lipper's 12 equity CEF classifications posted returns in the red: Pacific ex-Japan Funds (-1.31%) and Emerging Markets Funds (-0.10%) suffered the only losses.

In the equity universe domestic equity CEFs (+2.82%) handily outpaced their mixed-asset CEF (+2.27%) and world equity CEF (+1.00%) cohorts.

Equity Funds Post Second Best Q1 Return Since 1998

Tue, 02 Apr 2013 00:00:00 -0600

Equity funds (+7.68% on average) posted positive returns for Q1 2013, with U.S. Diversified Equity (USDE) Funds (+10.16%) outperforming Lipper's other three broad equity macro-classifications. Sector Equity Funds (+5.00%) lagged the USDE Funds macro-group by 516 basis points (bps), followed by Mixed-Asset Funds (+4.53%) and World Equity Funds (+3.81%).

With the addition of India Region Funds (-7.47%), Q4 2012's laggards generally remained in the cellar, with Precious Metals Equity Funds (-16.93%), Dedicated Short-Bias Funds (-11.57%), and Commodities Base Metals Funds (-6.89%) suffering the largest quarterly declines. Investors bid up previously out-of-favor stocks; Health/Biotechnology Funds (+15.53%) posted the strongest return for Q1.

Japanese Funds and Equity Leverage Funds (+6.15% each) catapulted to the top of the leader board for March, just 13 bps behind Health/Biotechnology Funds (+6.28%).

LAUNCHES, LIQUIDATIONS, AND MERGERS IN THE EUROPEAN MUTUAL FUND INDUSTRY, 2012 MARKET REVIEW

lipperclientservices@thomsonreuters.com — Mon, 11 Mar 2013 00:00:00 -0600

As of the end of December 2012 there were 31,938 mutual funds registered for sale in Europe. Luxembourg continued to dominate the fund market in Europe, hosting 8,493 funds, followed by France, where 4,973 funds were domiciled. In Q4 2012 525 funds were created in Europe. During the same period 497 funds were liquidated and 361 were merged.

The results of the fourth quarter show the industry is still consolidating its fund ranges. In total, 858 funds (497 liquidations and 361 mergers) were withdrawn from the market, while only 525 new products were launched.

The Month in Closed-End Funds: February 2013

Tue, 05 Mar 2013 00:00:00 -0700

For February only 37% of all closed-end funds (CEFs) traded at a premium. Only the World Income CEF macro-group traded at a premium (0.23%) for February; 47% of all fixed income CEFs traded in premium territory at month-end.

For February all but two of Lipper's taxable bond fund classifications posted plus-side returns, with Global Income Funds (-0.16%) and Emerging Markets Debt Funds (-0.46%) posting the only returns in the red.

With the risk-off trade taking the lead at month-end, once again all of Lipper's municipal debt CEF classifications posted positive NAV-based returns for February.

Succumbing to the pressures during the month, only 8 of Lipper's 12 equity CEF classifications posted returns in the black, with Emerging Markets Funds (-1.82%) suffering the largest loss.

In the equity universe mixed-asset CEFs (+0.93%) outpaced their domestic equity CEF (+0.22%) and world equity CEF (+0.01%) cohorts.

The Month in Closed-End Funds: January 2013

Tue, 05 Feb 2013 00:00:00 -0700

For January 47% of all closed-end funds (CEFs) traded at a premium. Six CEF macro-groups once again traded at a premium for January, with 63% of all fixed income CEFs trading in premium territory at month-end.

Despite strong returns for domestic fixed income funds (+1.30%), for the first month in eight not all of Lipper's taxable fixed income CEF classifications posted a positive NAV-based return for January--Corporate Debt BBB-Rated Funds lost 0.28% for the month. However, resolution of the "fiscal cliff" and tax-related issues pushed all municipal debt fund classifications (+1.02%) into positive territory for the month.

Despite a downgrade in global growth by the World Bank, world bond CEFs (+0.83%) managed to post a plus-side return, slightly underperforming taxable domestic bond CEFs (+1.30%) and municipal bond CEFs (+1.02%).

In the equity universe domestic equity CEFs (+5.35%) handsomely beat their world equity CEF (+3.74%) and mixed-asset CEF (+3.43%) cohorts.

The Evans Rule: 6.5 & 2.5

lipperclientservices@thomsonreuters.com — Mon, 07 Jan 2013 00:00:00 -0700

Risky assets built upon their Q3 momentum and leapt higher in Q4. Lipper’s Emerging Markets Debt Local Currency Funds group was the top fixed income performer for Q4 (+3.62%) and Emerging Markets Debts Funds won for the year (+18.48%).

High Yield Funds, up 3.06%, won the corporate debt race for the quarter. Corporate Debt BBB-Rated Funds was up 1.28% for the quarter.

Investors dropped Treasuries as well as other safe-harbor investments, sending General U.S. Treasury Funds down an average of 0.37% for the quarter.

Despite a mighty drop in December, munis were up an average of 0.63% for Q4.

The Month in Closed-End Funds: December 2012

lipperclientservices@thomsonreuters.com — Fri, 04 Jan 2013 00:00:00 -0700

• For December only 33% of all closed-end funds (CEFs) traded at a premium. None of the six CEF macro-groups that traded at a premium in November remained in premium territory in December.

• For the seventh month in a row all of Lipper's taxable fixed income CEF classifications posted a positive NAV-based return for December as investors continued to embrace fixed income instruments. However, poor performance from municipal debt funds (-2.36%) led to the first month of declines (-0.80%) witnessed by fixed income CEFs in nine months.

• Both equity and fixed income CEFs posted strong one-year returns for 2012, adding 15.42% and 15.04%, respectively, onto the 2011 year-end values.

• As a result of good news from China, world bond CEFs (+2.02%) outperformed taxable domestic bond CEFs (+1.16%) and municipal bond CEFs (-2.36%).

• In the equity universe world equity CEFs (+3.72%) handsomely beat their domestic equity CEF (+0.94%) and mixed-asset CEF (+1.34%) cohorts.

Despite Congressional Gyrations, Equity Funds Post Positive Q4 Returns

lipperclientservices@thomsonreuters.com — Thu, 03 Jan 2013 00:00:00 -0700

Equity funds (+2.01% on average) posted positive returns for Q4 2012, with World Equity Funds (+5.45%) outperforming Lipper's other three broad equity macro-classifications. Mixed-Asset Funds (+1.33%) lagged the World Equity Funds group by 412 basis points (bps), followed by U.S. Diversified Equity (USDE) Funds (+0.85%) and Sector Equity Funds (+0.31%).

Q3's leaders, were Q4's laggards, with Precious Metals Equity Funds (-12.49%), Commodities Precious Metals Funds (-7.55%), and Commodities Agriculture Funds (-6.62%) suffering the largest quarterly declines. Investors bid up previously out-of-favor stocks; China Region Funds (+10.81%) posted the strongest return for Q4.

Despite all the market doom and gloom in 2012, equity funds (+14.51%) outpaced the average taxable long-term fixed income fund (+7.35%).

Hong Kong MPF Market Summary (November 2012)