ECAT - Finding Opportunities In The Closed-End Fund World
2024-05-28 03:24:48 ET
Summary
- Closed-end funds have unique features that make them very attractive investment vehicles for the right asset classes and investors who understand them.
- Especially for complex and/or less liquid asset classes, like corporate senior loans, high-yield bonds, collateralized loan obligations, and the more recently discovered (by retail investors) "private credit"
- Activist and institutional investors are worth watching, so we can piggyback onto their efforts in the closed-end fund world.
Closed-End Funds: A Somewhat Different Animal
The closed-end fund market is, by definition, somewhat of an inefficient market, compared to many other larger securities markets. Trading volumes tend to be smaller, there is less liquidity, and many investors tend to be the type that are more interested in long-term steady income rather than traders focused on shorter term, buying and selling with an emphasis on scoring capital gains, rather than generating steady cash flow....
Finding Opportunities In The Closed-End Fund World