Closed-end funds (CEFs) are increasingly becoming favorites of retirees looking for income. And why not? Many pay 5%, 6% and even 7% or more today. In a world where stocks yield 2% and bonds just 3% or so, the extra dividends can be the key to a comfortable retirement.
The “closed” in CEF technically means that the fund’s pool of shares is fixed. Which is why these vehicles can have wild price swings above and below the values of their actual assets. (Good for us contrarian income seekers – we can buy below fair value to maximize our yields and upside.)
They are also closed in their actual communications with the financial world.… Read more