Last Monday, we talked about the two biggest mistakes many investors make when buying high-yielding closed-end funds (CEFs). Today we’re taking the opposite tack and delving into three things to look for to pick the very best of these 7.5%+ payers for your portfolio.
The upshot? If all three of these strengths are present, you likely have yourself a winner. But first things first—let’s talk a bit about what sets CEFs apart. These funds are different from ETFs and mutual funds in two key ways.
- CEFs have fixed share counts and generally can’t issue new shares to new investors (hence the “closed” in the name).