Do you know where you can get more information on CEF funds?I'd try http://www.cefa.com/ , http://www.cefconnect.com/ , and http://www.morningstar.com/Cover/CEF-Closed-End-Funds.aspx to start.The point about closed-end funds is that they don't repurchase their shares nor issue new units -- the shares are traded on an exchange, between investors, and the fund itself is not involved in that.As a result, the manager of a CEF knows exactly how much money they're dealing with: they don't have to keep cash around to meet redemptions, they don't risk having to sell assets in a panic for the same reason, nor do they have the headache of dealing with influx of fresh money at market tops (which may force open mutual funds to buy high, just like panic waves of redemptions may force them to sell low). The predictability is also what allows most CEFs to leverage up a little, prudently of course.The downside is that a gap can develop, and potentially persist indefinitely, between a CEF's market price, and its net-asset value (NAV). I personally prefer to buy below NAV, never above -- but there's no guarantee that the price/NAV won't go even further down (or further up) except the vague "value investing" idea that in the long run price and NAV must converge (but that run can be very long indeed...:-).This downside is what ETFs were designed to overcome (by allowing redemption and new-unit creation but only with delivery or reception of the underlying assets, in very large chunks, to selected institutional investors only) -- they allow a price-NAV discrepancy to be arbitraged away (although the possibility of having to deliver, or accept delivery of, big chunks of the underlying assets, while nowhere as bad as for the cash that open mutual funds must deliver or accept, still makes things a bit less predictable, so that very few ETFs are prudently leveraged like many CEFs are).I like to use a CEF for muni bonds (in my case, Nuveen's NKX, California munis tending to higher quality and with some modest leverage) but not for junk bonds (no leverage warranted there!-) so for those I use an actively managed ETF, HYLD). CEFs (thanks to leverage) might also make sense for Treasuries (if I wanted to hold any -- I currently don't) and investment-grade corporates (but for the latter I've instead chosen a large, steady actively managed mutual fund with a long history of low turnover and no redemption/inflow problems, VWIAX -- note it holds 1/3 dividend-paying blue chip stocks as well as 2/3 investment grade bonds, almost all of the latter being corporate ones).
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