Over the 30-day period May 23 through June 23, 2013, high-yield closed-end funds (CEFs) dropped 10.7% vs. 3.4% for its open-end counterpart (source: Morningstar). The primary reason for the large disparity is the use of leveraging by many high-yield bond CEFs. As interest rates rise, bond prices decline while the price of borrowing increases.
Of the $276 billion in CEFs, 61% was in bond CEFs (source: ICI, March, 2013). As of the end of May 2013, the typical high-yield CEF was yielding 8.1% (source: Morningstar). In January 2013, the average high-yield CEF was trading at a 2% premium over NAV; by mid-June, the premium had turned into a 6% discount.