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.
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.