New launches of closed-end stock funds are beginning to outnumber fixed-income closed-end fixed-income fund offerings, as the Federal Reserve Bank continues to raise interest rates.

Investment providers launched record numbers of fixed-income closed-end funds when low interest rates were conducive to leveraged strategies that boosted investors’ returns.

Industry experts warned these funds’ returns would suffer when interest rates inevitably rose from 40-year low figures, and, in fact, in recent months financial service firms have shifted their attention to closed-end stock funds without missing a beat.

Scudder Investments, Nuveen Investments and Eaton Vance joined the ranks of investment providers that raised $3.9 billion for eight closed-end stock funds since September.

Emerging patterns of closed-end stock fund launches clash sharply with other statistics revealing that municipal closed-end funds garnered 70% of closed-end fund assets raised in 2001. This year, 61.5% of assets raised through initial public offerings for closed-end funds flowed into stock funds.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.