Tuesday, February 25, 2014
Top Three Closed-End Funds With Yields Over… 8%
Closed-end funds (CEFs) are different from open-end funds (commonly known as mutual funds) in some significant ways.
For example, CEFs trade on an exchange intraday, just like exchange-traded funds (ETFs).
However, mutual funds and ETFs issue and redeem shares at their net asset value (NAV), so the number of shares fluctuates due to demand.
Conversely, CEFs have a fixed number of shares. The price of a CEF is determined by supply and demand in the secondary market, so the shares can trade at a persistent premium or discount to the underlying NAV. (more)
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at 12:03 AM