No. of Recommendations: 2
Hi Brian,

First on YLD try these links for some helpful data:

http://quicktake.morningstar.com/CEF/snapshot.asp?Country=USA&Symbol=YLD

http://www.cefa.com/scripts/fundstat.asp?id=YLD&d=1

Question 1: If bought what am I actually getting?There seems to be very limited information on this symbol other than what impresses me most, the dividend yield of roughly 18%. Am i right in what I'm seeing when I pull the information or is there something I'm missing? I can't even seem to get a straight understanding on whether this is truly a closed ended or open ended fund.

What you'd be getting is shares of this closed-end junk bond fund, basically.

Question 2: What is the difference between the closed ended and open ended funds? From what I could tell closed ended funds usually sell at a discounted rate. In some ways this seems bad because the fund may get sold later on at a less than market value if what I read is correct.

Open-end funds have some nice properties namely that the fund company will create and redeem shares as needed. A closed-end fund has a fixed number of shares that trade like a stock trades(So, if you buy someone else has to sell you some shares). Also, closed-end funds may have a certain time when the fund will be liquidated while open-end funds may last in theory forever.

Question 4: Given that I am invested heavily in technology (60%), standard core NYSE dividend companies (15%), five drips (15%), and two biotechs (10%), can these high yield dividend funds be a benefit? I would consider purchasing it in a Roth account if done therefore letting the dividend either grow for other purchases or to reinvest back in the original company. Currently both my wife's Roth and mine are 100% technology. All core NYSE stocks that pay dividends and the Drips are considered cash holdings given the slower growth.

Yes, but realize that hi-yield investments carry their own risks and that a junk bond fund can be quite junky(Those yields are high for a reason IOW).

Question 5: Where can I go to learn more about these types of funds?

The 2 links above are sites that tend to contain a fare amount of information about this things at times.

Question 6: One article I read seem to vaguely describe that fund managers are moving closed end funds to open end funds. Is this the correct assumption?

Well, there are some fund managers that have both an open and closed-end form of their funds. Also, some closed-end funds may change to be open-end down the line I think.

Question 7: Given that these particular funds either trade on the NYSE or AMEX that I've seen, they are not actual mutual funds that I can tell. However given that they are funds, do they impose fees like traditional mutual funds? If so, how are they paid, or when?

They have expenses just like open-end funds and work exactly the same in that the ER comes from cash the fund has. The difference is that unlike open-end funds, closed-end funds have no cash flow problems since the shares all trade on the exchange.

Anymore Qs?

JB
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