PCEF Fund Description
The PowerShares CEF Income Composite Portfolio tracks an index of three types of yield-focused closed-end funds: investment-grade fixed-income; high-yield fixed-income; and option-writing. Larger CEFs and those that trade at discount receive higher weights.
PCEF Factset Analytics Insight
Popular PCEF hunts for yield among publicly traded closed-end funds. CEFs differ from ETFs in that they are closed for additional new investment and share creation. Lacking ETF's baked-in creation/redemption plumbing, CEFs have no outlet for arbitrage to keep market price in line with fair value, so CEFs often trade at discounts or premiums. PCEF favors CEFs that trade at discounts on the theory that such funds are more likely to appreciate in value and because it increases the yield relative to actual price paid. PCEF holds three flavors of CEFs: Investment-grade fixed income, high-yield fixed income and equity covered-call strategies. PCEF trades well, with decent daily volume and manageable spreads. Yield-hungry investors have demonstrated strong interest in PCEF, despite the fund's high headline fee. In truth, most of this fee comes from the expenses of the underlying CEFs, which PCEF investors may be familiar with. Interested investors can also check out upstart ETF-of-CEFs rival, YYY.
PCEF Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of PCEF. PCEF is rated a N/A out of 5.