Closed-End Funds Are Making a Comeback as Investors Seek Attractive Valuations
Closed-end funds (CEFs), similar to phonograph records, are experiencing a resurgence in popularity among investors. Despite being largely ignored in recent years in favor of more modern investment structures such as open-ended mutual funds and exchange-traded funds (ETFs), CEFs are now attracting attention again for their attractive valuations. These funds trade at historic discounts, providing investors with the opportunity to buy assets for less than their actual value. The discounted prices result in higher yields, making CEFs an appealing investment option for those seeking income. Additionally, CEFs often utilize leverage, further enhancing their yield potential.
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