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Discount Opportunity Strategy Portfolio of CEFs Series 26

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Prospectus
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Investment Objective

The Discount Opportunity Strategy Portfolio of CEFs, Series 26 ("Trust") seeks to provide capital appreciation.

Principal Investment Strategy

Selection Criteria

Risks and Other Considerations

Portfolio Information

Daily Data

Offer Price $11.5142
Wrap Fee Price $11.2476
Liquidation Price $11.2476
Remaining Deferred Sales Charge $0.2250

CUSIPs

Cash 40177U627
Reinvest 40177U635
Fee/Cash 40177U643
Fee/Reinvest 40177U650

 

Deposit Information

Inception Date 10/5/2023
Non-Reoffered Date 4/5/2024
Mandatory Maturity Date 10/6/2025
Ticker Symbol CGDOAX
Trust Structure Grantor
Inception Unit Price $10.0000
Inception Liquidation Price $9.7750
Deferred Sales Charge Dates May 2024
Jun 2024
Jul 2024
Term 2 Years
Number of Holdings 40

Historical Annual Dividend Distribution*

Per Unit $0.8079
Rate 7.02%
Rate Fee Based 7.18%

* The Historical Annual Dividend Distribution (HADD) is as of the day prior to trust deposit and subject to change. There is no guarantee the issuers of the securities included in the Trust will declare dividends or distributions in the future. The HADD of the securities included in the Trust is for illustrative purposes only and is not indicative of the Trust’s distribution rate. The HADD is the weighted average of the trailing twelve-month distributions paid by the securities included in the portfolio and is reduced to account for the effects of fees and expenses, which will be incurred when investing in the Trust. The HADD will vary due to certain factors that may include, but are not limited to, a change in the dividends paid by issuers, a change in Trust expenses or the sale or maturity of securities in the portfolio.


Portfolio Holdings Analysis

Premium/Discount Of CEFs Held In Portfolio *

Trust Weighted Average -10.15%
Closed-End Fund ("CEF") Universe Average -7.55%

Historical Premiums/Discounts Of CEFs Held In Portfolio

High (3/13/24) -9.94%
Low (10/26/23) -14.06%
Average -11.40%

Premiums/Discounts Of CEFs Held In Portfolio *

(since inception)

* Closed-end funds may trade at a premium or discount to their net asset value (“NAV”). The Premium/Discount shown is for the underlying securities held by the closed-end funds in the UIT. This is the weighted average of all the CEFs in portfolio.

Asset Class

CEF Sector Category

CEF Sector Category

High Yield 14.95%
Covered Call 14.35%
Preferreds 12.91%
US Equity 12.81%
Municipal 9.72%
US Allocation 7.50%
Sector Equity 7.30%
Global Equity 5.11%
Senior Loans 4.83%
MLP 2.77%
Real Estate 2.62%
Global Allocation 2.57%
Convertibles 2.56%
Total 100.00%

Leverage Exposure

Weighted Average Leverage Ratio** 19.59%

** The Total value of the fund’s outstanding leverage presented as a percentage of total assets.

Example: Percentage of Total Assets represented by leverage.(e.g., Total Assets = $200M; Net Assets = $160M; Leverage = $40M. Leverage = 20%, calculated by dividing $40M by $200M.)

Premium/Discount and Holdings Analysis data is provided by Morningstar Traded Fund Center. Data is subject to change on a nightly basis. The data is for the underlying securities held by the closed-end funds in the UIT. The total percentages may not be equal to 100% due to rounding. N/A indicates that certain securities have not been identified and/or classified by the data provider.


The Closed-End Fund (“CEF”) Universe is comprised of all CEFs currently listed on U.S. exchanges.

© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Past performance is no guarantee of future results. Investment returns and principal value will fluctuate with changes in market conditions. Investors' units, when redeemed, may be worth more or less than their original cost.


Principal Investment Strategy

The Trust will invest in common shares of closed-end investment companies (“Closed-End Funds”) that are currently trading at a greater percentage discount to their net asset value (“NAV Discount”) than their historical NAV Discount. The Trust seeks capital appreciation by selecting Closed-End Funds that the Sponsor believes have the potential to narrow the gap between their current NAV Discount and their historical NAV Discount. The Trust portfolio will include a variety of Closed-End Funds, including general equity funds, taxable fixed-income funds, municipal funds and balanced/multi-asset funds. The Closed-End Funds will invest in securities of a variety of asset classes. These asset classes may include, but are not limited to:

  • high-yield securities or “junk” bonds;
  • convertible securities;
  • preferred securities;
  • real estate investment Trusts (“REITs”);
  • senior loans;
  • corporate bonds;
  • government bonds;
  • municipal bonds;
  • options;
  • foreign securities, including securities of companies located in emerging markets; and
  • equities.
As of the date of deposit, this Trust will hold a significant amount of its assets in Closed-End Funds that are principally invested in domestic and international options, high yield securities, equities, preferred securities and municipal bonds.

Selection Criteria

The Sponsor, with the assistance of Guggenheim Partners Investment Management, LLC (“GPIM”), an affiliate of Guggenheim Partners, LLC, has selected the securities to be included in the Trust’s portfolio according to the selection criteria described below.

The security selection process begins by identifying the entire universe of Closed-End Funds listed on a U.S. public securities exchange as provided by Morningstar. As of the security selection date, each Closed-End Fund is then ranked by:

  • Current NAV Discount versus historic monthly NAV Discounts, a metric commonly referred to as a “Z-Score.” The lowest “Z-Score” values represent the deepest discounts relative to prior range of discounts, and also represent the highest rank.
  • Trailing six month total return, where the highest values represent the highest rank.

Closed-End Funds with better ranks will be considered more strongly for inclusion in the Trust, subject to the Sponsor’s discretion. In addition, the Trust will be subject to the following constraints (as measured on the security selection date). For the constraints that reference Closed-End Fund classifications, the “Asset Category” and “Classification” attributes are sourced from Morningstar Traded Fund Center (formerly FundData).

  • Exclude Closed-End Funds in the initial universe ranked in the worst 20% in any of the following three metrics: (i) current NAV Discount, where lower values rank better, (ii) “Z-score,” where lower “Z-score” values rank higher, or (iii) trailing six month total return, as sourced from FactSet, where the highest values represent the highest rank;
  • No more than 60% in Closed-End Funds with “Asset Category” of “Equity”;
  • No more than 60% in Closed-End Funds with “Asset Category” of “Taxable Fixed Income”;
  • No more than 20% in Closed-End Funds with “Asset Category” of “Municipal”;
  • No more than 30% in Closed-End Funds with “Asset Category” of “Hybrid (Growth & Income)”;
  • No more than 25% in Closed-End Funds with the same “Classification”;
  • Exclude securities with trading liquidity of less than $400,000 (or less than the median trading liquidity of the entire Closed-End Fund starting universe if that is less than $400,000). Trading liquidity is measured by the median daily dollar volume (daily volume times closing daily price) over the prior 30 trading days, as sourced from FactSet; and
  • Exclude Closed-End Funds advised by the Sponsor or its affiliates.

Final Trust selections will be influenced by the rankings and constraints described above as well as the Sponsor’s outlook for an individual fund and/or Closed-End Fund marketplace. Closed-End Funds selected for the portfolio will be equally-weighted as of the selection date. Please note that due to the fluctuating nature of security prices, the weighting of an individual security or sector in the Trust portfolio may change after the selection date.

Some of the securities held by the Closed- End Funds are income-producing securities, including corporate bonds, preferred securities and high-yield bonds. These securities held by the Closed-End Funds may have fixed or floating rates. High-yield or “junk” bonds, the generic names for bonds rated below investment-grade, are frequently issued by corporations in the growth stage of their development or by established companies who are highly leveraged or whose operations or industries are depressed. Obligations rated below investment-grade should be considered speculative as these ratings indicate a quality of less than investment-grade. Because high-yield bonds are generally subordinated obligations and are perceived by investors to be riskier than higher rated securities, their prices tend to fluctuate more than higher rated securities and are affected by short-term credit developments to a greater degree. Additionally, they are subject to greater market, credit and liquidity risks than investment-grade securities.

Risks and Other Considerations

As with all investments, you may lose some or all of your investment in the Trust. No assurance can be given that the Trust’s investment objective will be achieved. The Trust also might not perform as well as you expect. This can happen for reasons such as these:

  • Securities prices can be volatile. The value of your investment may fall over time. Market value fluctuates in response to various factors. These can include stock market movements, purchases or sales of securities by the Trust, government policies, litigation, and changes in interest rates, inflation, the financial condition of the securities’ issuer or even perceptions of the issuer. Changes in legal, political, regulatory, tax and economic conditions may cause fluctuations in markets and securities prices, which could negatively impact the value of the Trust. Additionally, events such war, terrorism, natural and environmental disasters and the spread of infectious illnesses or other public health emergencies may adversely affect the economy, various markets and issuers. An outbreak of a novel form of coronavirus disease (“COVID-19”) was first detected in December 2019 and rapidly spread around the globe leading the World Health Organization to declare the COVID-19 outbreak a pandemic in March 2020 and resulting in major disruptions to economies and markets around the world. The complete economic impacts of COVID-19 are not yet fully known. The COVID-19 pandemic, or any future public health crisis, is impossible to predict and could result in adverse market conditions which may negatively impact the performance of the Trust and the Trust's ability to achieve its investment objectives. Units of the Trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
  • The Trust includes Closed-End Funds. Closed-End Funds are actively managed investment companies that invest in various types of securities. Closed-End Funds issue common shares that are traded on a securities exchange. Closed-End Funds are subject to various risks, including management’s ability to meet the Closed-End Fund’s investment objective and to manage the Closed- End Fund’s portfolio during periods of market turmoil and as investors’ perceptions regarding Closed-End Funds or their underlying investments change. Closed-End Funds are not redeemable at the option of the shareholder and they may trade in the market at a discount to their net asset value. Closed-End Funds may also employ the use of leverage which increases risk and volatility.
  • The Closed-End Funds are subject to annual fees and expenses, including a management fee. Unitholders of the Trust will bear these fees in addition to the fees and expenses of the Trust. See “Fees and Expenses” for additional information.
  • The value of the fixed-income securities in the Closed-End Funds will generally fall if interest rates, in general, rise. Typically, fixed-income securities with longer periods before maturity are more sensitive to interest rate changes. The Trust may be subject to greater risk of rising interest rates than would normally be the case due to the current economic environment
    and the effect of potential government fiscal policy initiatives and resulting market reaction to those initiatives.
  • A Closed-End Fund or an issuer of securities held by a Closed-End Fund may be unwilling or unable to make principal payments and/or to declare distributions in the future, may call a security before its stated maturity, or may reduce the level of distributions declared. A Closed-End Fund or an issuer may suspend distributions during the life of the Trust. This may result in a reduction in the value of your units.
  • The financial condition of a Closed- End Fund or an issuer of securities held by a Closed-End Fund may worsen, resulting in a reduction in the value of your units. This may occur at any point in time, including during the primary offering period. As the Trust is unmanaged, a downgraded security will remain in the portfolio.
  • Certain Closed-End Funds held by the Trust invest in securities that are rated below investment-grade and are considered to be “junk” securities. Below investment-grade obligations are considered to be primarily speculative with respect to the issuers ability to make principal and interest payments and may be more volatile than higher rated securities of similar maturity. Additionally they are subject to greater market credit and liquidity risks than investment trade securities. Accordingly, the risk of non-payment or default is higher than with investment-grade securities. In addition, such securities may be more sensitive to interest rate changes and more likely to receive early returns of principal in falling rate environments. 
  • Certain Closed-End Funds held by the Trust may invest in securities that are rated as investment-grade by only one rating agency. As a result, such splitrated securities may have more speculative characteristics and are subject to a greater risk of default than securities rated as investment-grade by more than one rating agency.
  • Certain Closed-End Funds held by the Trust invest in foreign securities. Investment in foreign securities presents additional risk. Foreign risk is the risk that foreign securities will be more volatile than U.S. securities due to such factors as adverse economic, currency, political, social or regulatory developments in a country, including government seizure of assets, excessive taxation, limitations on the use or transfer of assets, the lack of liquidity or regulatory controls with respect to certain industries or differing legal and/or accounting standards.
  • Certain Closed-End Funds held by the Trust invest in preferred securities. Preferred securities are typically subordinated to bonds and other debt instruments in a company's capital structure in terms of priority to corporate income and therefore will be subject to greater credit risk than those debt instruments. In addition, preferred securities are subject to other risks, such as having no or limited voting rights, having distributions deferred or skipped without a default occurring and changing or unfavorable tax treatments.
  • Closed-End Funds held by the Trust invest in municipal bonds. Municipal bonds are long-term fixed rate debt obligations that decline in value with increases in interest rates, an issuer’s
    worsening financial condition, a drop in bond ratings or when there is a decrease in the federal income tax rate. Typically, bonds with longer periods before maturity are more sensitive to
    interest rate changes. Municipal bonds generally generate income exempt from federal income taxation, but may be subject to the alternative minimum tax on individuals. For tax years
    beginning after December 31, 2022, interest on the bonds may affect the corporate alternative minimum tax for certain corporations. In addition, some or all of the income generated by a
    Closed-End Fund may not be exempt from regular federal or state income taxes and as a result, the related income paid by the trust may also be subject to regular federal and state
    income taxes. Capital gains, if any, may be subject to tax.
  • Certain Closed-End Funds held by the Trust invest in call options. The call writing portion of the investment strategy of the Closed-End Funds may not be successful in that the Closed-End Funds may not realize the full appreciation of stocks on which the Closed-End Funds have written call options. The ability to successfully implement the Closed-End Fund’s investment strategy depends on the Closed-End Fund’s adviser’s ability to predict pertinent market movements, which cannot be assured.
  • The value of a call option may be adversely affected if the market for the option becomes less liquid or smaller. The value of an option will be affected by changes in the value and dividend rates of the stock subject to the option, an increase in interest rates, a change in the actual and perceived volatility of the stock market and the common stock, and the remaining time to expiration.
  • Certain Closed-End Funds held by the Trust invest in common stocks. Common stocks represent a proportional share of ownership in a company. Common stock prices fluctuate for several reasons including changes in investors’ perceptions of the financial condition of an issuer, changes in the general condition of the relevant stock market, such as the market volatility recently exhibited, or when political or economic events affect the issuers. Common stock prices may also be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
  • Certain Closed-End Funds held by the Trust may invest in securities issued by small-capitalization and mid-capitalization companies. These securities customarily involve more investment risk than securities of large-capitalization companies. Small-capitalization and mid-capitalization companies may have limited product lines, markets or financial resources and may be more vulnerable to adverse general market or economic developments.
  • Economic conditions may lead to limited liquidity and greater volatility. The markets for fixed-income securities, such as those held by certain Closed-End Funds, may experience periods of illiquidity and volatility. General market uncertainty and consequent repricing risk have led to market imbalances of sellers and buyers, which in turn have resulted in significant valuation uncertainties in a variety of fixed-income securities. These conditions resulted, and in many cases continue to result in, greater volatility, less liquidity, widening credit spreads and a lack of price transparency, with many debt securities remaining illiquid and of uncertain value. These market conditions may make valuation of some of the securities held by a Closed-End Fund uncertain and/or result in sudden and significant valuation increases or declines in its holdings.
  • The Trust may be susceptible to potential risks through breaches in cybersecurity. A breach in cybersecurity refers to both intentional and unintentional events that may cause the Trust to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the Sponsor of the Trust to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. In addition, cybersecurity breaches of the Trust’s third-party service providers, or issuers in which the Trust invests, can also subject the Trust to many of the same risks associated with direct cybersecurity breaches.
  • The Trust is subject to risks arising from various operational factors and their service providers. Operational factors include, but not limited to, human error, processing and communication errors, errors of the Trust’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. Additionally, the Trust may be subject to the risk that a service provider may not be willing or able to perform their duties as required or contemplated by their agreements with the Trust. Although the Trust seeks to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks.
  • Inflation may lead to a decrease in the value of assets or income from investments.
  • The Sponsor does not actively manage the portfolio. The Trust will generally hold, and may, when creating additional units, continue to buy, the same securities even though a security’s outlook, market value or yield may have changed.

See “Investment Risks” in Part A of the prospectus and “Risk Factors” in Part B of the prospectus for additional information.

Please see the Trust prospectus for more complete risk information.

Unit Investment Trusts are fixed, not actively managed and should be considered as part of a long-term strategy. Investors should consider their ability to invest in successive portfolios, if available, at the applicable sales charge. UITs are subject to annual fund operating expenses in addition to the sales charge. Investors should consult an attorney or tax advisor regarding tax consequences associated with an investment from one series to the next, if available, and with the purchase or sale of units. Guggenheim Funds Distributors, LLC does not offer tax advice.




Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Fund Management (Europe) Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management. Securities offered through Guggenheim Funds Distributors, LLC.

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