Treasury and government mortgage bonds were in the midst of a brisk sell-off in May and every single member of the Lipper municipal bond sector posted significant losses with national muni bonds down -1.83% and state municipal bond funds losing just under 2% (-1.98%) for the month. Only two Lipper fixed income classes posted profits for the month. Loan Participation Funds gained 0.53% while High Yield Funds squeezed out a meager profit of 0.10%. On the equity side, just five of Lipper's twelve equity closed-end fund classifications posted positive returns for the month, led by Convertible Funds with a 2.02% monthly gain and Core Funds up 1.95%. Finding the cellar were Emerging Markets Funds (-3.05%) and Real Estate Funds (-4.30%, April's leader) -- the biggest Lipper losers in May.
World closed-end funds offered no relief during the month. Worries about slower growth in China combined with a stronger U.S. dollar saw World Equity CEFs lose -1.56% and World Income closed-end funds drop from a cliff, with losses of -3.62% in May. Meanwhile, the S&P 500 posted its seventh consecutive month of positive returns, up 2.08% for May. The Dow was on a six-month winning streak, gaining 1.86%. --Written by Hal M. Bundrick Follow @HalMBundrick