The Sabra Closed-End Funds ETF leverages closed-end fund discounts to deliver outsized returns and yield above most bonds.
The Sabra Closed-End Funds ETF (CBOE: CEFS) has returned 15% year-to-date while yielding 6%, outperforming most bond investments. The fund targets closed-end funds trading at discounts of up to 15% to their net asset value (NAV), using activist strategies to close the gap.
CEFS employs proxy battles and share buybacks, driven by Sabra Capital Management, to force conversions and unlock value. However, its 2.61% expense ratio and average daily volume below 100,000 shares raise liquidity and cost concerns compared to peers.
Unlike traditional ETFs, CEFS focuses on actively managed closed-end funds, which often trade at premiums or discounts to NAV. The fund’s hybrid structure combines ETF liquidity with CEF strategies, including leverage and margin use.