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Unlocking The Secrets Of Closed-End Funds

TedTed
in Fund Discussions
FYI: (Click On Article At Top Of Google Search)
Everything old is new again, at least in some places. Hipsters are scooping up vinyl LPs because of their supposedly superior sound versus compact discs and digital downloads, the modern music sources that had all but supplanted the older, analog format.

Some investors this year have been making a similar step back in time. Instead of the hot new format—exchange-traded funds—they’ve rediscovered their long-overlooked predecessors, closed-end funds. Both products are bought and sold like stocks on exchanges, but the similarity pretty much ends there.
Regards,
Ted
https://www.google.com/#q=Unlocking+the+Secrets+of+Closed-End+Funds+Barron's

Comments

  • heezsafe
    For a deeper dig into CEF opportunities, I might as well add another recent link on this thread, rather than start another post:
    http://blog.alphaarchitect.com/2016/10/11/digging-deeper-closed-end-fund-investment-opportunities/
    Closed end fund discounts and premiums are incredibly interesting to academic researchers because they represent a direct assault on the efficient market hypothesis (which roughly stated suggests that prices always reflect fundamental value). [...] So where does the research stand now and why are researchers still finding the the anomaly worth writing about? [...] The recent research involves four sometimes competing, yet often complementary theories:

    Investor Sentiment (irrational investors)
    Liquidity Based (the fund is more liquid than the sought after assets)
    Manager Ability/Cost (access to smart managers vs their cost)
    Rent-Extraction (another example of Wall Street hoodwinking Main Street)
    Reader needs to scroll a little ways down this blog post to find the meat on the bones.
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