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Closed-End Bond Funds in the Spotlight: Why Are Big Names Piling In?
From the Buzz & Banter: Hedge fund Saba Capital has increased its stake in these investments, and others may follow.
Michael Sedacca    

Today, Bloomberg's always-on-point credit markets reporter Lisa Abramowicz noted that this year, hedge funds Saba Capital (run by renowned manager Boaz Weinstein) and Pine River Capital Management are showing increases in closed-end bond funds that have significant discounts to NAV.

Saba now has $847.3 million in the closed-end funds vs $3.9 billion in total fund assets. However, note that Saba could be leveraged and/or the position could be hedged, so its exposure can't be calculated with certainty.

I have been in muni, mortgage, and credit funds since August of last year, but news starting to trickle out that big-name funds are piling in makes me sit up in my seat.

Moreover, Saba and Pine River are not alone in owning these funds. The likes of Bill Gross and Jeff Gundlach have been heavily in this space since Q3 of last year.

Perhaps others will join the trade?

If we see another pop in these funds over the coming weeks, I will probably exit stage left and reevaluate. I'm still not seeing any irrational exuberance in this space, so I don't think it's a reason to sell based on anything fundamental or structural. These funds, as a whole, are generally pricing their assets on a 10-year yield north of 3%.

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
Position in MVF and Various Mortgage Funds

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Closed-End Bond Funds in the Spotlight: Why Are Big Names Piling In?
From the Buzz & Banter: Hedge fund Saba Capital has increased its stake in these investments, and others may follow.
Michael Sedacca    

Today, Bloomberg's always-on-point credit markets reporter Lisa Abramowicz noted that this year, hedge funds Saba Capital (run by renowned manager Boaz Weinstein) and Pine River Capital Management are showing increases in closed-end bond funds that have significant discounts to NAV.

Saba now has $847.3 million in the closed-end funds vs $3.9 billion in total fund assets. However, note that Saba could be leveraged and/or the position could be hedged, so its exposure can't be calculated with certainty.

I have been in muni, mortgage, and credit funds since August of last year, but news starting to trickle out that big-name funds are piling in makes me sit up in my seat.

Moreover, Saba and Pine River are not alone in owning these funds. The likes of Bill Gross and Jeff Gundlach have been heavily in this space since Q3 of last year.

Perhaps others will join the trade?

If we see another pop in these funds over the coming weeks, I will probably exit stage left and reevaluate. I'm still not seeing any irrational exuberance in this space, so I don't think it's a reason to sell based on anything fundamental or structural. These funds, as a whole, are generally pricing their assets on a 10-year yield north of 3%.

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
Position in MVF and Various Mortgage Funds

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

More From Michael Sedacca
Daily Recap
Closed-End Bond Funds in the Spotlight: Why Are Big Names Piling In?
From the Buzz & Banter: Hedge fund Saba Capital has increased its stake in these investments, and others may follow.
Michael Sedacca    

Today, Bloomberg's always-on-point credit markets reporter Lisa Abramowicz noted that this year, hedge funds Saba Capital (run by renowned manager Boaz Weinstein) and Pine River Capital Management are showing increases in closed-end bond funds that have significant discounts to NAV.

Saba now has $847.3 million in the closed-end funds vs $3.9 billion in total fund assets. However, note that Saba could be leveraged and/or the position could be hedged, so its exposure can't be calculated with certainty.

I have been in muni, mortgage, and credit funds since August of last year, but news starting to trickle out that big-name funds are piling in makes me sit up in my seat.

Moreover, Saba and Pine River are not alone in owning these funds. The likes of Bill Gross and Jeff Gundlach have been heavily in this space since Q3 of last year.

Perhaps others will join the trade?

If we see another pop in these funds over the coming weeks, I will probably exit stage left and reevaluate. I'm still not seeing any irrational exuberance in this space, so I don't think it's a reason to sell based on anything fundamental or structural. These funds, as a whole, are generally pricing their assets on a 10-year yield north of 3%.

Twitter: @MichaelSedacca

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
Position in MVF and Various Mortgage Funds

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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