Sit's Income Investments
Sit Investment Associates Boosts Holdings in Multiple Income Funds Amid Broader Market Activity
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Key Points
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In Flaherty & Crumrine Total Return Fund (NYSE: FLC), Hennion & Walsh Asset Management increased its stake by 57.0% in the fourth quarter to 158,784 shares (up 57,626 shares), with the position valued at about $2.779 million.
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For TCW Strategic Income Fund (NYSE: TSI), Sit reported it owned approximately 21.37% of the closed-end fund, and the articles note that institutional investors and hedge funds collectively own 35.22% of the fund’s shares.
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In MFS Charter Income Trust (NYSE: MCR), Riverbridge Partners LLC nearly doubled its stake, lifting its position by 89.9% in the fourth quarter to 193,336 shares (up 91,541 shares), valued at about $1.212 million.
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For Putnam Premier Income Trust (NYSE: PPT), the articles describe the fund’s investment mandate as targeting “current income” with a “secondary objective of capital appreciation.”
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Putnam Premier Income Trust (NYSE: PPT): Sit’s position is described as its 8th-largest holding, and the articles state that hedge funds and other institutional investors own 42.79% of PPT.
Sit Investment Associates added 766,863 shares of TCW Strategic Income Fund (NYSE: TSI) in the fourth quarter of 2023, pushing its total stake to over 10.2 million shares worth about $50.4 million, according to MarketBeat. The Minneapolis-based firm now owns roughly 21.37% of the entire fund — a position that signals deep conviction in income-focused closed-end funds as interest rates appeared to near their peak.
The TSI move was not a one-off. Sit also boosted holdings in three other closed-end income funds: Flaherty & Crumrine Total Return Fund (FLC), MFS Charter Income Trust (MCR), and Putnam Premier Income Trust (PPT). Together, the four moves point to a deliberate strategy of concentrating capital in fixed-income funds trading at discounts to their underlying assets.
Sit's Four-Fund Buying Spree in Q4 2023
Sit's largest Q4 addition was in TSI, where it added 766,863 shares — an 8.1% increase — bringing its position to 10,230,227 shares, per Defense World. In PPT, it grew its stake by 3.6% to nearly 28.3 million shares worth about $100.2 million, making PPT its 8th-largest holding. Institutions and hedge funds collectively own 42.79% of PPT.
In MCR, Sit added enough shares to lift its position by 16.2%, reaching roughly 4.0 million shares worth about $25.0 million. For FLC, Sit added 66,761 shares, raising its total to about 1.04 million shares valued at $18.2 million, according to Watchlist News. All four funds focus on fixed income — covering mortgage-backed securities, preferred stocks, and corporate bonds.
Why Closed-End Funds? The Discount and Yield Play
Closed-end funds issue a fixed number of shares and trade on stock exchanges. They often trade at a
Other Institutions Move In Alongside Sit
Sit was not alone. In FLC, Hennion & Walsh Asset Management added 57,626 shares in Q4 — a 57% jump — bringing its total to 158,784 shares worth about $2.78 million, per Defense World. In MCR, Riverbridge Partners nearly doubled its position, adding 91,541 shares for an 89.9% increase, bringing its total to 193,336 shares worth about $1.21 million.
This simultaneous buying across multiple firms points to what analysts call an
Risks Loom for Funds With Heavy Institutional Ownership
Sit's 21.37% stake in TSI is large relative to the fund's daily trading volume. If Sit ever decided to sell, it could push the share price sharply lower. Institutions and hedge funds already own 35.22% of TSI total, meaning a small number of players control a big slice of the fund, according to MarketBeat.
There is also a leverage risk. These funds borrow money to boost their yields. If interest rates stay high, borrowing costs rise and distributions could be cut. For PPT, Franklin Templeton completed its acquisition of Putnam Investments in January 2024, adding a layer of management change on top of the rate uncertainty. Sit's expanded PPT position may reflect a bet that Franklin Templeton will maintain the fund's income payouts under its new ownership.
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