Insight
A Primer on Closed-End Funds
Closed-end funds trade at prices that may differ from their net asset value, creating unique opportunities for investors. Discover how their structure, market inefficiencies, and institutional strategies can enhance portfolio returns.
Key takeaways
- A closed-end fund’s price often differs from its net asset value, creating opportunities for potential excess returns and portfolio enhancements.
- With a fixed pool of assets under management, fund managers can strategically deploy capital throughout market cycles without being forced to buy or sell based on investor flows.
- Retail investors drive most of the closed-end fund market, leading to inefficiencies that institutional investors can exploit using advanced analytics and governance influence.