The NAVigator

John Cole Scott, President of CEF Advisors, climbs his mountain of data to get a great view on the year ahead, and he's forecasting no recession, lower inflation and modest GDP growth for 2026, with less volatility coming from the rate picture but more market tension due to the global macro picture. Scott, who also serves as chairman of the Active Investment Company Alliance, also discusses what he sees happening in the closed-end fund industry, from the growth he expects to see in assets to the activism picture, down to what he foresees in leverage, return of capital and more. Plus, he's got five funds he's expecting big things from in the new year.

Richard Stone, Chief Executive Officer for The Association of Investment Companies (the British equivalent to the Active Investment Company Alliance), discusses differences in the activist investor cultures in the United States and Great Britain, noting that the British model is more about engagement with the board and a collaborative effort to improve the business, while the U.S. model has shifted towards an entrenched fight to make change and capture opportunities. With Saba Capital emerging as the leading activist on both sides of the pond, Stone discusses how he sees activism continuing to change. In addition, he discusses how interval funds are viewed in England, and whether "venture capital trusts" (the country's tax-advantaged alternative to business development companies) could work in private credit markets globally.

Bryce Doty, senior portfolio manager at Sit Investment Associates, says that "every time a new Fed chair comes in, they do something dumb," and with Jerome Powell on his way out as the chairman of the Federal Reserve, he expects some chaos that will create opportunities, potentially as soon as the next chairman of the central bank is announced. "The interpretation — and mis-interpretation — of what's going to happen is going to be crazy," Doty says, but that "complete mess" should create opportunity that turns out well for investors who ride it out and who "don't expect logic and reason to rule the day, at least for a quarter or two." Doty also talks about where he is moving money during tax-loss selling season and the changing discount picture as the market has returned to record highs.

Long-time activist investor Phil Goldstein of Bulldog Investors sat down with NAVigator host Chuck Jaffe at the Active Investment Company Alliance Fall Roundtable in New York City on Nov. 19 to discuss the current state of shareholder activism and why there seems to be so much less of it than there was just a few years back. While there have been moves and regulations that have made it harder for activist moves to succeed, Goldstein also says that there has been better fund management, resulting in less opportunity/need for activists to get involved.

John Cole Scott, President of CEF Advisors, looks at tax-loss selling season and whether it has started yet, noting that a few asset classes have largely been able to avoid situations where there will be widespread harvesting this year, while others (most notably business-development companies) may be poised for a lot of tax-driven reshuffling before year's end. Scott, who is the chairman of the Active Investment Company Alliance, also answers some questions on the value of tax-loss harvesting if it means selling a fund you like, and how he recognizes yield traps and spots big discounts that are poor buying opportunities.

The Active Investment Company Alliance held its annual Fall Roundtable in New York City on Nov. 19, and NAVigator host Chuck interviewed Ryan Paylor, Portfolio Manager at Thomas J. Herzfeld Advisors, which recently converted a closed-end fund from a focus on companies located in the Caribbean Basin — ticker Symbol CUBA — to one focused on collateralized loan obligations. Paylor explains the thinking behind the move and how shareholders reacted to the fund's drastic makeover.

Consumers have a tradition of going bargain hunting on Black Friday, but The NAVigator has a day-after-Thanksgiving ritual too, looking for discounts on closed-end funds with John Cole Scott, President of CEF Advisors and The Chairman of the Active Investment Company Alliance. For the fourth straight year, he's looking at market bargains in time for the holiday, and this year he is looking at two municipal-bond funds, two business-development companies and two direct offerings that the market has put on sale and that investors might want to consider wrapping up for their portfolios.

In an interview recorded at the Active Investment Company Alliance Fall Round Table in New York City on Wednesday, Nov. 19, David Tepper of Tepper Capital Management talks about the state of the closed-end fund business, ranging from the classic funds he has held for a many years to his concerns about the boom in private credit, the potential for trouble if the economy turns and what he might be looking to invest in if the market turns away from the large-cap tech companies that have been leading the way for the market.

Josh Duitz, Global Head of Income for Aberdeen — Manager of the Aberdeen Total Dynamic Dividend Fund — talks about where he is finding success in generating elevated income at a time when rate cuts are making it harder for investors to earn easy yields. Duitz discusses international investing and whether the rally overseas can continue in the face of reduced currency impacts, where high-flyers like the Magnificent Seven stocks fit in with his portfolio (or don't), and which sectors he is finding most attractive right now.

Seth Brufsky, Chief Executive Officer for the Ares Dynamic Credit Allocation Fund, talks about how the start of rate cuts and a falling interest rate environment impacts high-yield bonds, leveraged loans and collateralized loan obligations, noting that fixed-rate high-yield investments should get a boost from lower rates, but that the floating-rate paper also can benefit thanks to better arbitrage opportunities and improved credit quality. Brufsky notes that rate-cut environments should give active management an edge over passive funds, at least for a time as the market adjusts to the changes.