What to Know About This Fund’s $6 Million Exit From a Next-Generation Connectivity Fund

On May 12, 2026, Thomas J. Herzfeld Advisors, Inc. reported selling out its entire position in the Neuberger Next Generation Connectivity Fund (NYSE:NBXG), with an estimated transaction value of $5.65 million based on quarterly average pricing.

What happened

According to a filing with the Securities and Exchange Commission dated May 12, 2026, Thomas J. Herzfeld Advisors eliminated its holding in Neuberger Next Generation Connectivity Fund (NYSE:NBXG), selling 412,390 shares. The estimated transaction value was $5.65 million, calculated using the average unadjusted close for the first quarter of 2026. The quarter-end value of the position fell by $5.95 million, reflecting both the sale and changes in NBXG’s share price over the period.

What else to know

• Top holdings after the filing:
  • NYSE: FSSL: $35.14 million (12.0% of AUM)
  • NYSE: PDX: $27.65 million (9.4% of AUM)
  • NYSE: FSCO: $18.77 million (6.4% of AUM)
  • NYSE: HFRO: $15.51 million (5.3% of AUM)
  • NASDAQ: HERZ: $12.51 million (4.3% of AUM)
• As of May 11, 2026, shares of NBXG were priced at $15.42, up about 21% over the past year.

Fund overview

Fund snapshot

• NBXG offers a closed-end fund focused on next-generation connectivity, investing in companies poised to benefit from advancements in communication and digital infrastructure.
• The fund generates revenue through investment income and capital appreciation from a diversified portfolio of connectivity-related assets.
• It targets institutional and individual investors seeking exposure to technology-driven connectivity themes and stable income streams.

The Neuberger Next Generation Connectivity Fund Inc. is a non-diversified, limited term closed-end management investment company with a mandate to deliver both capital appreciation and income. The fund leverages Neuberger Berman's expertise in asset management to identify and invest in companies at the forefront of digital connectivity and infrastructure evolution. Strong net income and a high dividend yield reflect the fund's disciplined investment approach and focus on delivering value to shareholders.

What this transaction means for investors

This sale ultimately seems like a move away from a volatile, AI-heavy thematic trade that has become increasingly difficult to navigate amid geopolitical tensions, rate uncertainty, and sharp swings in tech sentiment. NBXG has still delivered solid returns over the past year, but the underlying volatility inside the portfolio appears to have made some investors uncomfortable.

In its latest commentary, the fund itself acknowledged that the first quarter became one of the “more complex macro backdrops in recent memory,” citing Middle East conflict, rising oil prices, and growing skepticism around AI infrastructure spending. NBXG’s NAV fell 8.5% during the quarter, badly lagging the MSCI All Country World Index decline of 3.2%.

Still, management remains aggressively positioned around AI infrastructure. Semiconductor and semiconductor-adjacent holdings represented 32% of assets at quarter-end, with major exposure to Nvidia, Taiwan Semiconductor, Western Digital, and SK hynix. The fund also continues investing in private growth companies tied to connectivity and digital infrastructure themes.

For long-term investors, the biggest attraction may actually be valuation. NBXG traded at roughly a 13.4% discount to NAV at quarter-end while offering an 11.2% market distribution rate. But the fund’s recent performance also highlights how crowded and sentiment-driven AI infrastructure investing has become, especially when macro conditions deteriorate quickly.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.