UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: katinga Big funky green star, 20000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 89148  
Subject: Closed-end funds Date: 3/8/2001 1:49 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Granted TMF's hostility to mutual funds, I think they're throwing out the baby with the bath water when it comes to closed-end funds.

Reason: They trade at a discount. Sometimes they open end, thereby causing the discount to go bye-bye with a nice profit. Often they specialize in areas of the world or industries for which the average Joe is clueless but senses long-term growth possibilities. Being closed-end, they don't have to maintain cash reserves to guard against redemptions.

Example: Scudder New Asia (SAF), trading at a 20%+ discount with a recent insider buy.

Example: Invesco Global Health Sciences (GHS) which will probably soon open-end (though it recently made some bad calls and had a management change).

Screening criteria:

Minimum 20% discount.
Management track record, or committee run.
Tracks or beats the relevant average minus the management fee.
Insider buys.
Management fee X percent less than the open end industry standard for the fund class.
Better than even money risk to reward ratio. (High reward for above average risk would be a pass.)

It would also be nice were TMF to add a discount/premium number to the quotes service for closed ended funds.

Long GHS from when it had an 18% discount
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next

Announcements

Community Town Hall
Banter, potshots, and all the stuff we said you can't post on ITF. Why not try it?
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement