Quote:
Originally Posted by Boomer
That’s what I thought, but I need specifics on why the advisor is advising CEFs.
This really is an “asking for a friend” question because a friend asked me. I have read several articles that define closed-end funds, but I keep circling back around to a big fat WHY?
We cannot control the market, but we can control the expenses of investing.
Even though there are those who will say not to worry about expenses because it is “the fund” that is paying the expenses, I cannot get my head around that one because doesn’t the fund get the expense money from the investor?
Boomer
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The stated dividend is after the expenses are paid. So if the fund says 6% dividend they have taken their fees before declaring that thus the fee comes out of the fund not what you will get paid.
An advantage of a closed end fund is that they can trade below NAV so you could be getting $1.00 of assets for less than a dollar. An index fund and open fund trades for NAV.