Play The Odds With Term Funds: Annualized Gains Up To 15%

Apr. 11, 2024 4:03 PM ET, , , , , , 8 Comments

Summary

  • There are three types of closed-end fund structures: perpetual, term, and target term. Term funds aim to minimize the discount at which the fund trades versus its share price.
  • Today we have four funds that are nearing their completion dates. JPI, DCF, CBH, and IHTA. We'll go through them one-by-one.
  • Term funds are similar to buying a discounted bond that is nearing its maturity. There are a few other risks that are involved here.
  • Investors are more handsomely compensated for this risk with close to equity-like returns, lower than equity risk, and much greater visibility.
  • Use limit orders to gain entry into these.

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In the world of closed-end funds, ("CEFs") there are three types of fund structures.

  • Perpetual: As it sounds, the fund has a perpetual mandate and continues to operate 'forever'
  • Term: This fund has a

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This article was written by

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Alpha Gen Capital is a former financial advisor and his analysis is meant to provide a relatively safer income stream with CEFs and mutual funds. He has been writing about investing on Seeking Alpha for the past decade and he aims to help investors better understand how to properly construct a portfolio.

Alpha Gen Capital leads the Investing Group Yield Hunting: Alt Inc Opps, where along with his team of analysts, he focuses on closed-end funds and getting yield from bonds to complement dividend portfolios. The service is dedicated to income investors who are searching for yield without the high risk of the equity market. Additionally, they provide 4 actively managed portfolios.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of JPI, DCF, IHTA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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