mjrmgs2

Three Closed-End Funds of Funds

George and Eric: Thanx for your informative memos.
The closed end funds ADX and PEO have a low cost tax basis because of appreciation since original purchase by the funds. This subjects purchasere to capital gains taxes on prior appreciation, when shares in the portfolios of the closed end funds are sold by the funds. Thus, purchasers' cost tax basis of the shares in the fund portfolios, when the funds are purchased, may be as much as 40% below the tax basis if the underlying shares were purchased directly. This tax detrement would not apply to pensions and IRAs.

Ray