Investing in Closed-end Funds: Finding Value & Building Wealth

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Summary: The Bible of Closed-end Fund Investing
Review: This IS the definitive work on the arcane world of closed-end fund (CEF) investing. CEFs provide an excellent method to target particular investment sectors -- especially international markets and fixed income. I like using CEFs for part of the fixed income component of an investment portfolio. When properly managed, they will enhance your dividend yield and supply capital appreciation potential. CEFs can provide greater yields by deriving dividends from portfolio assets at net asset value (NAV), but pay them based on the share's market price -- which can be at a discount to NAV. Simply put, you can buy dividends on $10 worth of assets for only $9. The investor (or their advisor) must, however, monitor the CEF's discount to premium spread versus NAV on a regular basis. CEFs can be tricky. I recommend all new CEF investors start out with this book -- it's a little dated -- but the principles remain true. Note Steven Samuels' advice: Never buy a CEF on the IPO -- and I would add, never buy one at a premium.