The CEFX is designed to serve as a fair, impartial, and transparent benchmark for the performance of US closed-end funds, which focus their investment management processes on attaining yield. The index embraces many of the largest and most successful yield-oriented, closed-end funds in the US and has been structured to facilitate transactional efficiency. Key closed-end fund sectors included in the CEFX are:
Investment Grade Fixed-Income. Closed-end funds that invest primarily in government securities, corporate bonds, agency bonds, and foreign government securities rated BBB or higher.
High-Yield Fixed Income. Closed-end funds that invest primarily in corporate bonds, emerging market debt, and bank debt rated BBB or lower.
Option Income. Closed-end funds that invest in equities and concurrently write call options on equities and equity indexes.
Key defining factors include:
Breadth of Coverage. The CEFX seeks to include all closed-end funds with defined investment objectives that correspond to the three sectors over a certain size and with sufficient secondary market liquidity.
Qualitative Screens. The CEFX excludes certain closed-end funds that maintain expense ratios over 2% per year and trade at premiums to net asset value of more than 20%.
Rules Based. The CEFX is compiled based upon a clearly defined rules-based methodology, which is overseen by an Index Committee.
Data-Rich. The CEFX is supported by extensive data, including the wide dissemination of real time prices, a five-year back tested history, and important information about constituent funds.
Index values for the S-Network Composite Closed-End Fund Index are disseminated under the following ticker: CEFX.