Closed-end Funds paying hefty dividends


An often-sleepy corner of the mutual-fund world is enjoying a sudden boom: "closed-end" funds. Like exchange-traded funds, or ETFs, closed-end funds trade on a stock market but may have certain trading quirks, limiting their appeal. Now, fund companies are overhauling these funds' investment strategies and rolling out new offerings, and investors are snapping them up.More than $13 billion has been raised in closed-end funds this year, or more money than was raised in all of 2006. More than 30 such IPOs are expected at the NYSE this year. One of the biggest quirks of closed-end funds -- their tendency to trade at a discount to the underlying portfolio -- is also improving.In March, the median discount for all closed-end funds narrowed nearly a full percentage point, to 2.34% -- the lowest discount in the past 12 months. Today, about 35% of such funds are trading at a premium, compared with about 20% in 2005, according to fund researcher Lipper.Closed-end-fund providers have been focusing on a strategy searching out stocks that pay big dividends. One goal is to take advantage of recent tax-law changes that can lower taxes on dividend income if funds hold the stocks for a certain amount of time- Wall Street Journal

Most Viewed Portfolios

View All


4 Huge Stocks to Trade (or Not)

08.18.14 | 12:00 PM

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating ...

5 Rocket Stocks to Buy for Gains This Week

08.18.14 | 11:45 AM

BALTIMORE (Stockpickr) -- The big bounce in the S&P 500 followed through last week, ending the big index 1.2% higher on Friday than it started Mond...

More Articles
blog comments powered by Disqus
brokerage partners
connect with Stockpickr
Fan us on FaceBook
Follow us on Twitter