2Q25 Quarterly Markets Review: CEF, BDC & SPAC
Members of the RiverNorth investment team provide a high-level overview of the of the closed-end fund (CEF), business development company (BDC) and special purpose acquisition company (SPAC) markets.
Speakers:
- Steve O’Neill, CFA
Portfolio Manager - Jon Browne
Portfolio Manager, Senior Investment Analyst - Eric Pestrue, CFA
Portfolio Manager, Senior Investment Analyst - Jack Bosco, CFA
Investment Analyst
Moderator:
- Chris Lakumb, CFA, CAIA
Investor Relations
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. References to specific securities, asset classes, and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Opinions referenced are as of the day presented and are subject to change due to changes in the market, economic conditions, or changes in the legal and/or regulatory environment and may not necessarily come to pass.
Risk Information: The price at which a closed-end fund trades often varies from its net asset value (NAV). Some funds have market prices below their NAVs – referred to as a discount. Conversely, some funds have market prices above their NAVs – referred to as a premium. Investing involves risk. Principal loss is possible.
Special purpose acquisition companies (“SPACs”) are collective investment structures that pool capital in order to seek potential acquisition opportunities. SPACs and similar entities, often referred to as “blank check” companies, have no operating history or ongoing business other than to seek a potential acquisition. Certain SPACs may seek acquisitions only in limited industries or regions, which may increase the volatility of their prices. Investments in SPACs may be illiquid and/or be subject to restrictions on resale. To the extent the SPAC is invested in cash or similar securities, this may impact a Fund’s ability to meet its investment objective.
Diversification does not ensure a profit or a guarantee against loss.
Definitions
- A Closed-End Fund is a portfolio of pooled assets that raises a fixed amount of capital through an initial public offering (“IPO”) and then lists shares for trade on a stock exchange.
- Net Asset Value (“NAV”) is the net value of an investment fund’s assets less its liabilities, divided by the number of shares outstanding.
- The price at which a closed-end fund trades often varies from its NAV. Some funds have market prices below their net asset values – referred to as a discount. Conversely, some funds have market prices above their net asset values – referred to as a premium.
- Basis points (“BPS”) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.
- Taxable bonds are debt securities subject to taxation at various government levels.
- Municipal bond closed-end funds are defined as funds that invest in a diversified portfolio of investment-grade municipal bonds in a variety of sectors and States.
- Liquid funds are debt funds that invest in short-term assets such as treasury bills, government securities, repos, certificates of deposit, or commercial paper.
- Market capitalization, or market cap, is the current market value of all of a company’s outstanding stock shares.
- Alpha is a measure of performance on a risk-adjusted basis. The excess return of a fund relative to the return of the benchmark index is a fund’s alpha.
- Business Development Company (“BDC”) is an organization that invests in small- and medium-sized companies as well as distressed companies. A BDC helps the small- and medium-sized firms grow in the initial stages of their development.
- Private credit or private debt investments are debt-like, non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies (“BDCs”), to fund private businesses.
- Cryptocurrencies are digital or virtual currencies tracked on digital ledgers and not backed by real assets.
Past performance is no guarantee of future results.
Investors should consider the investment objectives, risks, charges and expenses of RiverNorth’s mutual funds (or Investment Companies) carefully before investing. To obtain a prospectus containing this and other important information, please call 888.848.7569 or visit rivernorth.com. Please read the prospectus carefully before investing.
Open-end mutual funds are distributed by ALPS Distributors Inc., FINRA Member firm. RiverNorth is not affiliated with ALPS.
NOT FDIC INSURED – NO BANK GUARANTEE – MAY LOSE VALUE