What’s to like about Closed End Funds (CEFs)?
- October 30, 2011
- Posted by: Parker Evans
- Category: Bonds, Closed End Funds (CEFs), Leverage, Portfolio Management, Research, Stocks, Tax Free
Unlike ETFs, Closed End Funds generally have no preset process or mechanism for creation and redemption of shares. Instead, when an investor wants to buy or sell he must do so in the open market. As a result CEFs often trade at a discount to net asset value. A substantial discount can represent a favorable opportunity to invest.