When investors ask me why they should invest in closed-end funds (CEFs), I tell them three things:
First, CEFs pay an outsized income stream—7% yields are easy to get and easy to sustain with a CEF portfolio.
Second, CEFs often trade for less than their intrinsic worth. While ETFs trade at their net asset value (NAV, or the liquidation value of the assets in their portfolios), CEFs can trade for 10% less … or even more.
That can set you up for nice 20%+ upside on top of those 7%+ dividends.
And finally, if not most importantly, a bunch of CEFs have crushed the S&P 500 for years.…
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