The 13 closed end fund (CEF) types on average were up 2.5% for the week ending 9/18/09. On an aggregate, unweighted basis, the weekly average price increase for 627 CEFs was up 2.3%. The weighted 49 CEFs as of 9/18/09 comprising the Claymore CEF Index registered an average increase of 3.1% for the week. The S&P 500, as measured by the SPDR S&P 500 ETF (SPY), registered an increase of 1.9%.

The sheer quantum of bad news due in forthcoming months forms a compelling basis to continue seeking substantively misaligned asset classes in the marketplace. As it is becoming evident that government intervention is rapidly destroying traditional valuation premises in the financial sector, the challenge today is to identify opportunities which will not draw the attention of Washington lawmakers and regulators, for bailout purposes, for many months into 2009.

Vulture investors in fixed income securities are mainly hedge funds and other institutional investors. However, there will soon be some good opportunities for retail investors in leverage loan closed end funds.

Leveraged loans are unregistered loans made by banks to lower rated non-investment grade corporate borrowers. These are typically longer term loans with floating rates spread above LIBOR. In some ways, they are similar to high yield bonds, and some non-investment grade corporate borrowers use both leveraged loans and high yield bonds. But there are some important differences: