The NAVigator

John Miller, head of municipals at Nuveen, says that the combination of the American Recovery Act and the progress towards recovery and the growing vaccination numbers, have made it so that state and local governments that had been crying poverty are now seeing a boom. He notes that municipal tax revenues have held up better than expected through the pandemic, and now are poised to increase; coupled with stimulus monies, he believes conditions are right for improved credit quality which should help muni bonds thrive for at least the next few years.

Will Rhind of GraniteShares talks about balancing high yields against risk in the GraniteShares High-Income Pass Through Securities ETF, a fund that invests entirely in business development companies and closed-end funds. Rhind discusses why the fund currently favors closed-end funds slightly, how he believes it is miscategorized by the 'stack-and-rank services' like Morningstar and talks about a few investments and why they pass muster with the fund's methodology.

Nick Holmes, portfolio manager for the Tortoise Essential Assets Income fund, discusses how investing in water infrastructure is mostly lumped in with other infrastructure plays, which he considers a mistake, noting that water is viewed differently as an asset class around the world than it is in the United States. He explains why his fund gets involved in private investments, how it was hit harder than most closed-end funds during the market';s 2020 decline and why he thinks both the fund and water assets are poised for success moving forward.

Paul Wick, long-time manager of the Columbia Seligman Communication and Information Fund -- one of the most successful sector funds in history -- talks for the first time about managing a closed-end fund, Columbia Seligman Premium Technology Growth, and discusses the similarities and differences between the two, and whether he views the closed-end fund as a chance to get a bargain price on his flagship fund. One similarity between the funds: annualized average returns north of 15 percent since inception.

Neil Azous, chief investment officer at Rareview Capital, says that 10-year real US interest rates -- which have been on the rise for the last few weeks -- are 'the most impending danger' to investor portfolios. He says the market is now acting as if the pandemic is nearly over and says that investors need to be thinking of the big economic themes beyond the re-opening, including the changing rate picture.

Maury Fertig, chief investment officer at Relative Value Partners, discusses the factors he considers when picking closed-end funds to add to client portfolios, and how those criteria are impacted by current market conditions that have seen closed-end issues get whipsawed by the market over the last year. Fertig appeared on The NAVigator last week, but this appearance in the Money Life Market Call serves as a special bonus episode/follow-up with much more of his closed-end fund insight.

Maury Fertig, chief investment officer at Relative Value Partners, says the market's rebound from a year ago has made it harder to find closed-end issues worth buying and holding now, but he says there are selected opportunities still worth pursuing. He suggested that floating-rate funds and credit funds will continue to perform well, and that closed-end funds still offer value from a discount level, but with discounts narrowing, investors should look at cutting back. He also discusses closed-end funds as an alternative source of yield, why he never buys at a premium and more.

Bill Pekowitz, portfolio manager for the Aberdeen Global Premier Properties Fund, says that lockdowns during the coronavirus pandemic hit brick-and-mortar retail, hotels, office space and the urban apartment sectors, but boosted cell towers, warehouses, industrial data centers and more. Now, with economic recovery, he expects some troubled areas to rebound and suggests balancing real estate investments between those that are peaking with those that are recovering.

Wendy Huang, business development manager for primary markets at the London Stock Exchange Group, discusses the differences between American markets and closed-end funds and those in England and explains why fund sponsors and businesses are finding it particularly lucrative and timely to take their issues overseas now.

Anne Kritzmire, an independent closed-end fund trustee, explains how the role of directors differs in closed-end funds compared to traditional mutual funds, where boards are known for passing everything management's way. She explains the ways in which independent directors in closed-end funds have a more active hand in oversight on key factors like leverage, involvement in alternative and illiquid investments, dividend payout policies and interactions with activist shareholders, and how that involvement is crucial in protecting investors.

Michael Roomberg, manager of the Miller/Howard High Income Equity Fund, says that the end of election uncertainty -- and sustainable fiscal policy that provides a tailwind for domestic consumption -- and the development of vaccines for coronavirus fueled a rally in value stocks at the end of 2020 that should carry through 2020, especially as investors get more excited about stocks and broaden their interest beyond the few names that drove the market a year ago. While value has struggled as an asset class since the turn of the century, Roomberg notes that it outperformed growth stocks for the majority of the 1990s, and he thinks that, pos-pandemic, high-dividend value stocks are set up for that kind of run of outperformance again.

William Costigan, managing director at Guggenheim Partners and senior member of the active fixed-income team, says that with real interest rates low and nominal yields on Treasuries at or below zero, investors must look to creatively expand their bond exposure. He calls for investors to be more creative, more thoughtful and do more homework' -- looking at, for example, alternative credits -- if they are going to be satisfied with returns in the current environment.

Larry Antonatos, portfolio manager overseeing real asset strategies at Brookfield Asset Management, says that infrastructure investments will benefit in 2021 from the political changes in Washington that may spur additional government investments, as well as the end of the pandemic, which should lead to economic expansion. He says that real assets -- and infrastructure in particular -- will benefit from job creation in the short run and long-term GDP growth down the line to pick up performance in the year ahead and beyond.

John Cole Scott of Closed-End Fund Advisors, the founding chairman of the Active Investment Company Alliance, compares 2020 to unusual years from the past, looks at the best and worst performing investment areas for closed-end funds from this year and looks ahead at the opportunities ahead in 2021.

Cheryl Pate, portfolio manager for Angel Oak Capital, says that banks took steps to shore up their balance sheets and now are sitting on excess reserves, which should boost earnings in the latter half of 2021. Coupled with a positive picture on interest rates, inflation and government oversight, she says valuations are poised to show gains next year, although she notes that she has a slight preference for owning financial debt versus equity in the year ahead.

Andrew Kerai, senior credit strategist and portfolio manager at RiverNorth Capital Management, says that investors looking to improve fixed income returns should consider middle-market corporate credits and other issues in the private credit market, but he notes that investors should be attuned to downside risks, noting that they make more with a manager who does better avoiding defaults than with one who chases higher yield but takes on more risk.

James Clark, client portfolio manager at Nuveen Asset Management, says that real assets and infrastructure investments -- normally consistent, defensive investments -- have seen those appealing characteristics under attack because of the pandemic shutdowns, but he noted that Covid-19 tended to accelerate trends that were in place rather than disrupting those movements. With the development of a vaccine,he expects pricing to firm up as uncertainty starts to melt away -- 'the worst case scenario has been taken off the table for a lot of folks' -- but for those positive trends to continue, particularly in an area like industrial real estate.

Jonathan Browne, director of closed-end fund research at Robinson Capital, says that investors should be looking to closed-end funds to help solve the yield challenges they face today, when low interest rates have challenged the traditional 60-40 portfolio and when bonds have performed in lock-step with the stock market. While the industry keeps developing new and different investment solutions, Browne notes that closed-end funds are a more simple half-step toward alternatives that can be just as effective.