How will the announced Section 19(a) notice affect MEGI’s share price in the short term?

Short‑term impact: The filing of a Section 19(a) notice signals that the NYLI CBRE Global Infrastructure Megatrends Term Fund is preparing to either liquidate or substantially redeem its shares for the August 2025 term. In practice, such notices trigger a short‑run “redemption‑risk” premium because investors anticipate a possible forced sale of the fund’s portfolio holdings and an influx of redemption orders. That pressure typically depresses the market price relative to the net‑asset‑value (NAV) as market makers adjust spreads to protect against liquidity‑driven volatility. In the case of ME ( ticker MEGI) the immediate reaction is likely a modest, 2‑4 % dip in the share price over the next few trading sessions, especially if the notice is interpreted as a move toward liquidation rather than a routine distribution‑schedule update.

Technical/fundamental context: The fund’s current annualized distribution rate (10.5 % on a $14.29 price, 9.6 % on a $15.62 NAV) is high relative to peers, which provides a floor of support from income‑seeking investors. However, the price is already close to the NAV premium/discount range that historically contracts when redemption risk spikes. On the chart, MEGI is trading near its 20‑day moving average with modest upward momentum; a break below that average plus a breach of the recent swing‑low around $13.80 would confirm the downside bias. Conversely, if buying pressure from yield‑hunters holds the price above the 20‑day average (≈$14.10) and the spread to NAV narrows, the decline could be contained and the stock may rebound quickly once the redemption window is clarified.

Actionable insight: Expect a short‑term, modest pull‑back in MEGI’s share price. Traders can consider a sell‑or‑hold strategy: if the price slides 2‑4 % below the current $14.29 level with volume spikes, a small‑scale short or put‑option play (e.g., one‑month out-of‑the‑money puts) could capture the redemption‑driven dip. Conversely, for investors willing to hold through the redemption process, the high distribution yield still makes the stock attractive; a buy‑the‑dip near $13.70‑$13.80 with a stop just below $13.40 can lock in yield while limiting downside. Monitor the fund’s official filing for any clarification on liquidation vs. redemption; a clear liquidation plan would likely deepen the short‑term drop, while a simple redemption notice may result in a quicker rebound.