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Cuba-focused fund rockets on expected U.S. policy shift
December 17, 2014 / 4:55 PM / 3 years ago

Cuba-focused fund rockets on expected U.S. policy shift

(Reuters) - Shares of the Herzfeld Caribbean Basin Fund (CUBA.O) jumped by nearly 40 percent to a seven-year high on record volume on Wednesday following reports that the Obama administration was preparing to announce sweeping changes to U.S. policy about Cuba.

The fund, a closed-end mutual fund listed on Nasdaq under the ticker “CUBA,” holds stocks and assets that fund manager Thomas Herzfeld believes would benefit from an eventual end to the U.S. economic embargo against Cuba.

Shares of the fund shot to as high as $9.60, their highest since November 2007, from the previous day’s close of $6.81, a two-month low. They last traded at $9.51.

Volume topped 11.8 million shares, by far a record amount of trading. Volume was more than 70 standard deviations above its previous daily average of around 11,000.

The fund, with just $34 million in net assets at the end of November, has 60 holdings, according to Reuters data, and many of them were outperforming the wider market on Wednesday.

Its largest is Panamanian airline Copa Holdings SA, accounting for around 8.5 percent of fund assets, which was up 3.7 percent.

MasTec Inc. (MTZ.N), a U.S.-based construction services company, is the No. 2 holding accounting for 6.3 percent of fund assets and was up 7.3 percent.

Other top holdings include:

    Cola-Cola Femsa, up 2.6 percent

    Royal Caribbean (RCL.N), up 3.7 percent

    Seaboard Corp (SEB.A), down 1.4 percent

    Lennar Corp (LEN.N), up 1.8 percent

    Norwegian Cruise Line Holdings (NCLH.O), up 1.4 percent.

    Reporting By Dan Burns; Editing by Chizu Nomiyama

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