2024-04-30 06:17:02 ET
Summary
- Closed-end funds (CEFs) are an interesting investment option that maintain a constant share quantity and can be bought and sold on stock exchanges.
- The Invesco CEF Income Composite ETF is a fund-of-funds that diversifies its portfolio by investing in various CEFs.
- PCEF has a diverse set of holdings, with a near 50/50 split between stocks and bonds, and a current yield of about 9.59%.
Closed-end funds don't get much attention relative to mutual funds and ETFs, but they are an interesting part of the investment landscape to consider. What are closed-end funds? A closed-end fund ((CEF)) distinguishes itself as an investment vehicle by maintaining a constant share quantity, in contrast to open-end funds that can freely issue or buy back their shares based on investor demand. These shares are publicly traded on stock exchanges, allowing them to be bought and sold by investors similarly to how stocks are. This unchanging share structure allows portfolio managers to pursue long-term investment goals without the distraction of managing incoming and outgoing capital due to shareholder transactions. Nonetheless, it also leads to the possibility of CEFs being valued above or below their actual net asset value in the market, influenced by the shifting tides of investor interest and overall market outlook. This aspect of CEFs presents both potential rewards and risks, positioning them as an interesting option for investors aiming for portfolio diversification or targeting specific sectors of the market....
Read the full article on Seeking Alpha
For further details see:
PCEF: For Those Who Like Closed-End Fund Yield