How I Beat the 2022 CEF Crash and What My System Shows Now (March 30, 2026)
5 years, one complete market cycle, and what 368 CEFs look like right now
2022 was the worst year for closed-end funds in 40 years. The average CEF dropped 20-25%. The S&P 500 fell 18.1%. Leveraged bond CEFs got destroyed. Distribution cuts were everywhere.
My systematic CEF strategy lost 4.91%.
That single number is why I started writing this. Not because I think I have all the answers, but because the data shows that a disciplined, rules-based approach to CEF investing can survive the worst environments and capture the recovery that follows.
Here is the full track record, verified through Interactive Brokers:
2021 (partial year): +5.42% - Account opened mid-year. Strategy launched.
2022: -4.91% - While average CEFs dropped 20-25%.
2023: +23.19% - Recovery captured from positions entered during the crash.
2024: +26.08% - Consistent execution through the rate cut cycle.
2025: +34.89% - Best year. Strategy running at full capacity.
Four-year average (2022-2025): approximately 19.8% per year through a complete market cycle, including the worst stress test in decades.
What happened in 2022
Rising interest rates crushed bonds and anything that held them. Leveraged CEFs got hit twice: their underlying portfolios dropped AND their borrowing costs spiked. Discounts widened to levels not seen in years. Funds that had been paying reliable distributions for a decade started cutting.
Most CEF investors held through the pain, hoping for a bounce. Many sold at the bottom. Some bought “cheap” funds that turned out to be cheap for a reason.
My system did something different. It monitored health indicators across the entire CEF universe and flagged funds that were deteriorating before the worst damage hit. It moved me out of vulnerable positions early. Then, when prices hit genuinely attractive levels, it signaled entries that captured the 2023-2025 recovery.
What I built
Over time, I turned that systematic approach into an automated decision engine that monitors all 368 closed-end funds in the market. It tracks 10 different health and deterioration warning flags for every fund, validates its own accuracy monthly against actual returns, and produces clear signals: BUY, HOLD, WATCH, AVOID, or SELL.
Right now, as of late March 2026, the system shows:
28 funds with BUY signals (timing is right and the fund is healthy)
68 funds on HOLD (good funds, but not at attractive prices yet)
36 on WATCH (timing looks good but health is declining)
156 on AVOID (poor timing, poor health, or both)
80 on SELL (critical deterioration, exit recommended)
That means roughly 80% of all CEFs are either not worth buying or actively deteriorating right now. The system is selective by design.
What this newsletter will cover
Every week, I will write about the CEF market through the lens of data, not opinion. What the numbers show, what is changing, and what patterns are emerging across the 368-fund universe.
Every month, I will publish a Signal Scorecard showing how the system’s BUY and SELL signals actually performed against the broader CEF universe. No cherry-picking. If the signals underperform, I will publish that too.
I will never recommend specific funds to buy or sell. That depends on your individual situation, risk tolerance, and goals. What I will do is share the framework for thinking about CEFs systematically, so you can make better decisions with your own portfolio.
Later this year, I plan to open paid access to the live dashboard itself, so subscribers can see every signal, every health score, and every deterioration flag for themselves.
For now, everything here is free. Subscribe to get the weekly newsletter and monthly Signal Scorecard delivered to your inbox.
Download the full performance summary
Past performance does not guarantee future results. This is not investment advice. Individual results vary by entry point, position sizing, and fund selection. The strategy uses margin, which amplifies both gains and losses. Returns are Time-Weighted Rate of Return (TWRR) from Interactive Brokers, which strips out deposits and withdrawals to show pure strategy performance.