Scott F

Closed-End Funds: Taking It on the Chin?

December did prove oversold, though less than November, but most of these ten funds are not remotely worth buying. They are at deep discounts and going deeper because they are crap. If you could buy a bag of rotten fruit at a discount to its peers, would that make it cheap? Also, these discounts in many cases are actually *understated*. These funds often have made-up dividends (i.e., return of capital), invented NAVs (Type 2 and 3 accounting evaluation methods), huge annual fees, and terrible long-term track records. The managers are largely incompetent and just milking the funds for their fees until they dissolve. These are only trading vehicles, and little more than gambling at that.