Rhunzzz

FFA: A Closed-End Fund That's Not Too Defensive

I've always wondered about these "managed distribution" closed-end funds. They may give an irresistible yield and discount, but ultimately how sustainable are the payouts? And when most of them that I have seen trade at perennial discounts to NAV, one wonders - why continue to invest in something which causes your principal to shrink over time?

Why Fundamental Indexes Lagged Cap-Weighted in '07

I can't help but think of John Bogle's comment that, over time, growth and value will have their own turns in the financial wilderness (or in the sun), and therefore costs should be the overriding consideration.

The Powershares FTSE RAFI funds are expensive at >70 basis points. The WisdomTree funds are better priced, but they still can't beat Vanguard's <20 basis points. The idea of fundamental weighting makes a lot of sense to me, but those expense ratios make me hesitate.