The Closed End Fund ETF Quietly Returning 15% While Yielding More Than Most Bonds

The Sabra Closed-End Funds ETF is quietly delivering roughly 15% year-to-date returns by exploiting NAV arbitrage across the closed-end fund universe. CEFS is an ETF that invests in closed-end funds and is actively managed, often using leverage to boost income, unlike typical passive ETFs. CEFS trades with a fixed number of shares and can move away from NAV, unlike many ETFs that trade near NAV. Launched on 3-21-2017, CEFS aims to capture NAV discount opportunities by buying CEFS and potentially converting to an open-end fund or liquidating underperforming assets. Costs accompany the strategy: CEFS carries a 2.61% expense ratio and a 1.10% management fee, with capital-intensive activism and conversion costs to consider.