Closed-End Funds
14 Cheap International Closed-End Funds
The Wall Street Journal’s Jason Zweig has written an interesting article on the risks of high yields paid by closed-end funds. Closed-end funds trade like stocks and are considered cheap when they trade at a discount to their NAVs. They trade at a premium if the market price is more than their NAV. Closed-end funds can be extremely volatile especially during tough market conditions.
Jason Zweig mentions three funds which recently traded at a high premium and whose high yields may be unsustainable. The three funds noted are:
Pimco Global StocksPLUS & Income Fund (PGP)
Pimco High Income Fund(PHK)
Gabelli Utility Trust (GUT)
Investing in closed-end funds just for high yields is risky. However they can be considered for gaining some diversification in a portfolio.
The following 14 International Closed-End Equity Funds trade at a discount of at least 10% to their NAVs:
1. The Central Europe & Russia Fund (CEE)
Current Premium/Discount: -11.83%
2. Morgan Stanley Eastern Europe Fund (RNE)
Current Premium/Discount: -10.04%
3. The Mexico Fund (MXF)
Current Premium/Discount: -12.23%
4. First Israel Fund (ISL)
Current Premium/Discount: -10.05%
5. Korea Equity Fund (KEF)
Current Premium/Discount: -10.90%
6. First Trust/Aberdeen Emerging Opportunity (FEO)
Current Premium/Discount: -11.44%
7. Clough Global Equity (GLQ)
Current Premium/Discount: -13.88%
8. Clough Global Opportunities (GLO)
Current Premium/Discount: - 13.07%
9. The Thai Fund (TTF)
Current Premium/Discount: -15.55%
10. The Malaysia Fund (MAY)
Current Premium/Discount: -14.08%
11. The Taiwan Fund (TWN)
Current Premium/Discount: -11.53%
12. The Thai Capital Fund (TF)
Current Premium/Discount: -17.01%
13. Morgan Stanley Frontier Emerging Market Fund (FFD)
Current Premium/Discount: -13.91%
14. Emerging Markets Telecommunications Fund (ETF)
Current Premium/Discount: -12.30%
Source: CEFA
Closed-End Funds with more than 10% dividends
In volatile market times, it is a good idea to take little baby steps with investing via closed-end funds. Here are five closed-end funds which have a distribution rate of more than 10%. Funds that trade at a discount are cheaper.
1.ING Global Equity Dividend Premium (IGD)
Premium/Discount: -7.69%
Distribution Rate: 13.10%
2.Spain Fund (SNF)
Premium/Discount: -9.50%
Distribution Rate: 12.60%
3.Aberdeen Australia Equity Fund (IAF)
Premium/Discount: 8.18%
Distribution Rate: 11.17%
4.Clough Global Opportunities Fund (GLO)
Premium/Discount: -10.34%
Distribution Rate: 10.14%
5.BlackRock International Growth and Income Trust(BGY)
Premium/Discount: -10.68%
Distribution Rate: 12.43%
Related post:
Closed-End Funds Conondrums
Closed-End Funds Conondrums
Which Closed-End funds should you buy now?
Invest in those funds that are trading at a discount to the NAV.Simply put they are cheap.
What are some of the funds trading cheap now?
Here are five closed-end funds:
1. Mexico Fund - MXF
Discount to NAV: -14.09%
2. New Germany Fund - GF
Discount to NAV: -13.40%
3. Singapore Fund - SGF
Discount to NAV: -12.64%
4. The New Ireland Fund - IRL
Discount to NAV: -11.55%
5. Chile Fund - CH
Discount to NAV: -9.19%
