Closed-end fund
Encyclopedia
A closed-end fund is a collective investment scheme
with a limited number of shares
. It is called a closed-end fund (CEF) because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash
or securities
until the fund liquidates.
Typically an investor can acquire shares in a closed-end fund by buying shares on a secondary market
from a broker
, market maker
, or other investor as opposed to an open-end fund
where all transactions eventually involve the fund company creating new shares on the fly (in exchange for either cash or securities) or redeeming shares (for cash or securities).
The price of a share in a closed-end fund is determined partially by the value of the investments in the fund, and partially by the premium (or discount) placed on it by the market. The total value of all the securities in the fund divided by the number of shares in the fund is called the net asset value
(NAV) per share. The market price of a fund share is often higher or lower than the per share NAV: when the fund's share price is higher than per share NAV it is said to be selling at a premium; when it is lower, at a discount to the per share NAV.
In the U.S.
legally they are called closed-end companies and form one of four SEC
recognized types of investment companies along with mutual fund
s, exchange-traded fund
s, and unit investment trust
s. Other examples of closed-ended funds are investment trust
s in the UK
and listed investment companies in Australia
.
s. In the U.S.
the New York Stock Exchange
is dominant although the NASDAQ
is in competition; in the UK
the London Stock Exchange
's main market is home to the mainstream funds although AIM
supports many small funds especially the Venture Capital Trust
s; in Canada, the Toronto Stock Exchange lists many closed-end funds.
Like their better-known open-ended cousins, closed-end funds are usually sponsored by a funds management company which will control how the money is invested. They begin by soliciting money from investors in an initial offering, which may be public or limited. The investors are given shares corresponding to their initial investment. The fund managers pool the money and purchase securities. What exactly the fund manager can invest depends on the fund's charter. Some funds invest in stocks, others in bonds, and some in very specific things (for instance, tax-exempt bonds issued by the state of Florida
in the USA).
Another distinguishing feature of a closed-end fund is the common use of leverage
or gearing to enhance returns. CEFs can raise additional investment capital by issuing auction rate securities, preferred stock
, long-term debt, and/or reverse-repurchase agreements. In doing so, the fund hopes to earn a higher return with this excess invested capital.
When a fund leverages through the issuance of preferred stock, two types of shareholders are created: preferred stock shareholders and common stock shareholders.
Preferred stock shareholders benefit from expenses based on the total managed assets of the fund. Total managed assets include both the assets attributable to the purchase of stock by common shareholders and those attributable to the purchase of stock by preferred shareholders.
The expenses charged to the common shareholder are based on the common assets of the fund, rather than the total managed assets of the fund. The common shareholder's returns are reduced more significantly than those of the preferred shareholders because the expenses are spread among a smaller asset base.
For the most part, closed-end fund companies report expenses ratios based on the fund's common assets only. However, the contractual management fees charged to the closed-end funds may be based on the common asset base or the total managed asset base.
The entry into long-term debt arrangements and reverse-repurchase agreements are two additional ways to raise additional capital for the fund. Funds may use a combination of leveraging tactics or each individually. However, it is more common that the fund will use only one leveraging technique.
Since closed-end funds are traded like stock, a customer trading them will pay a brokerage commission similar to one paid when trading stock (as opposed to commissions on open-ended mutual funds where the commission will vary based on the share class chosen and the method of purchasing the fund). In other words, closed-end funds typically do not have sales-based share classes where the commission and annual fees vary between them. The main exception is loan-participation funds.
for American closed-end funds. Any investor who wishes to buy or sell fund shares at that point will have to do so on the secondary market. Excluding exceptional circumstances, closed-end funds do not redeem their own shares. Nor, typically, do they sell more shares after the IPO (although they may issue preferred stock, in essence taking out a loan secured by the portfolio).
Closed-end funds trade on exchanges and in that respect they are like exchange-traded fund
s (ETFs), but there are important
differences between these two kinds of security. The price of a closed-end fund is completely determined by the valuation of the market, and this price often diverges substantially from the NAV of the fund assets. In contrast, the market price of an ETF trades in a narrow range very close to its net asset value, because the structure of ETFs allows major market participants to redeem shares of an ETF for a "basket" of the fund's underlying assets.http://oyc.yale.edu/economics/financial-markets/content/transcripts/transcript-18-professional-money-managers-and This feature could lead to potential arbitrage
profits if the market price of the ETF were to diverge substantially from its NAV. The market prices of closed-end funds are often ten to twenty percent higher or lower than their NAVs, while the market price of an ETF is typically within one percent of its NAV. Since the market downturn of late 2008 a number of fixed income ETF's have traded at premiums of roughly two or three percent to their NAV's.
US closed-end stock funds often have share prices that are 5% or more below the Net Asset Value (NAV). That is, if a fund has 10 million shares outstanding and if its portfolio is worth $200 million, then each share represents a claim on that NAV of $20 and you might expect that the market price of the fund's shares on the secondary market would be around $20. But that's typically not the case. The shares may trade for only $19 or even only $17. In the former case, the fund would be said to be "trading at a 5% discount to NAV." In the latter case, the fund would be said to be "trading at a 15% discount to NAV."
The presence of discounts is also puzzling since if a fund is trading at a discount, theoretically a well-capitalized investor could come along and buy up all the fund's shares at the discounted price in order to gain control of the portfolio and force the fund managers to liquidate it at its (higher) market value (although in reality, liquidity concerns make this impossible since the Bid/offer spread will drastically widen as fewer and fewer shares are available in the market). Benjamin Graham
claimed that an investor can hardly go wrong by buying such a fund with a 15% discount. However, the opposing view is that the fund may not liquidate in your timeframe and you may be forced to sell at an even worse discount; but like any investment, these discounts could simply represent the assessment of the marketplace that the investments in the fund may lose value.
Even stranger, funds very often trade at a substantial premium to NAV. Some of these premiums are extreme, with premiums of several hundred percent having been seen on occasion. Why anyone would pay $30 per share for a fund whose portfolio value per share is only $10 is not well understood, although irrational exuberance has been mentioned. One theory is that if the fund has a strong track record of performance, investors may speculate that the outperformance is due to good investment choices by the fund managers and that the fund managers will continue to make good choices in the future. Thus the premium represents the ability to instantly participate in the fruits of the fund manager's decisions.
A great deal of academic ink has been spent trying to explain why closed-end fund share prices aren't forced by arbitrageurs to be equal to underlying portfolio values. Though there are many strong opinions, the jury is still out. It is easier to understand in cases where the CEF is able to pick and choose assets and arbitrageurs are not able to determine the specific assets until months later, but some funds are forced to replicate a specific index and still trade at a discount.
, the value is precisely equal to the NAV. So investing $1000 into the fund means buying shares that lay claim to $1000 worth of underlying assets (apart from sales charges). But buying a closed-end fund trading at a premium might mean buying $900 worth of assets for $1000.
Some advantages of closed-end funds over their open-ended cousins are financial. CEFs don't have to deal with the expense of creating and redeeming shares, they tend to keep less cash in their portfolio, and they need not worry about market fluctuations to maintain their "performance record". So if a stock drops irrationally, the closed-end fund may snap up a bargain, while open-ended funds might sell too early.
Also, if there is a market panic, investors may sell en masse. Faced with a wave of sell orders and needing to raise money for redemptions, the manager of an open-ended fund may be forced to sell stocks he'd rather keep, and keep stocks he'd rather sell, because of liquidity concerns (selling too much of any one stock causes the price to drop disproportionately). Thus it may become overweight in the shares of lower-quality or underperforming companies for which there is little demand. But an investor pulling out of a closed-end fund must sell it on the market to another buyer, so the manager need not sell any of the underlying stock. The CEF's price will likely drop more than the market does (severely punishing those who sell during the panic), but it is more likely to make a recovery when the intrinsically sound stocks rebound.
Because a closed-end fund is on the market, it must obey certain rules, such as filing reports with the listing authority and holding annual stockholder meetings. Thus stockholders can more easily find out about their fund and engage in shareholder activism, such as protest against poor management. http://securities.stanford.edu/news-archive/2004/20040122_Headline08_McSherry.htm
Newer CEFs include:
Collective investment scheme
A collective investment scheme is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group...
with a limited number of shares
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
. It is called a closed-end fund (CEF) because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
or securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
until the fund liquidates.
Typically an investor can acquire shares in a closed-end fund by buying shares on a secondary market
Secondary market
The page applies to the finanical term; For the merchandising concept, see Aftermarket .The secondary market, also called aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold....
from a broker
Stock broker
A stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors...
, market maker
Market maker
A market maker is a company, or an individual, that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread, or turn. From a market microstructure theory standpoint, market makers are net sellers of an option to be...
, or other investor as opposed to an open-end fund
Open-end fund
An open-end fund is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders...
where all transactions eventually involve the fund company creating new shares on the fly (in exchange for either cash or securities) or redeeming shares (for cash or securities).
The price of a share in a closed-end fund is determined partially by the value of the investments in the fund, and partially by the premium (or discount) placed on it by the market. The total value of all the securities in the fund divided by the number of shares in the fund is called the net asset value
Net asset value
Net asset value is a term used to describe the value of an entity's assets less the value of its liabilities. The term is most commonly used in relation to open-ended or mutual funds because shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net...
(NAV) per share. The market price of a fund share is often higher or lower than the per share NAV: when the fund's share price is higher than per share NAV it is said to be selling at a premium; when it is lower, at a discount to the per share NAV.
In the U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
legally they are called closed-end companies and form one of four SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
recognized types of investment companies along with mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s, exchange-traded fund
Exchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
s, and unit investment trust
Unit Investment Trust
A Unit Investment Trust is a US investment company offering a fixed portfolio of securities having a definite life. UITs are assembled by a sponsor and sold through brokers to investors.-Types:...
s. Other examples of closed-ended funds are investment trust
Investment trust
An Investment trust is a form of collective investment found mostly in the United Kingdom. Investment trusts are closed-end funds and are constituted as public limited companies....
s in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and listed investment companies in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
.
Availability
Closed end funds are typically traded on the major global stock exchangeStock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s. In the U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
is dominant although the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
is in competition; in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
's main market is home to the mainstream funds although AIM
Alternative Investment Market
AIM is a sub-market of the London Stock Exchange, allowing smaller companies to float shares with a more flexible regulatory system than is applicable to the main market....
supports many small funds especially the Venture Capital Trust
Venture Capital Trust
A venture capital trust or VCT is a highly tax efficient UK closed-end collective investment scheme designed to provide private equity capital for small expanding companies and capital gains for investors...
s; in Canada, the Toronto Stock Exchange lists many closed-end funds.
Like their better-known open-ended cousins, closed-end funds are usually sponsored by a funds management company which will control how the money is invested. They begin by soliciting money from investors in an initial offering, which may be public or limited. The investors are given shares corresponding to their initial investment. The fund managers pool the money and purchase securities. What exactly the fund manager can invest depends on the fund's charter. Some funds invest in stocks, others in bonds, and some in very specific things (for instance, tax-exempt bonds issued by the state of Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
in the USA).
Distinguishing features
Some characteristics that distinguish a closed-end fund from an ordinary open-end mutual fund are that:- it is closed to new capital after it begins operating, and
- its shares (typically) trade on stock exchanges rather than being redeemed directly by the fund.
- its shares can therefore be traded during the market day at any time. An open-end fund can usually be traded only at the closing price at the end of the market day.
- a CEF usually has a premium or discount. An open-end fund sells at its NAV (except for sales charges).
- a closed-end company can own unlisted securities.
Another distinguishing feature of a closed-end fund is the common use of leverage
Leverage (finance)
In finance, leverage is a general term for any technique to multiply gains and losses. Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives. Important examples are:* A public corporation may leverage its equity by borrowing money...
or gearing to enhance returns. CEFs can raise additional investment capital by issuing auction rate securities, preferred stock
Preferred stock
Preferred stock, also called preferred shares, preference shares, or simply preferreds, is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument...
, long-term debt, and/or reverse-repurchase agreements. In doing so, the fund hopes to earn a higher return with this excess invested capital.
When a fund leverages through the issuance of preferred stock, two types of shareholders are created: preferred stock shareholders and common stock shareholders.
Preferred stock shareholders benefit from expenses based on the total managed assets of the fund. Total managed assets include both the assets attributable to the purchase of stock by common shareholders and those attributable to the purchase of stock by preferred shareholders.
The expenses charged to the common shareholder are based on the common assets of the fund, rather than the total managed assets of the fund. The common shareholder's returns are reduced more significantly than those of the preferred shareholders because the expenses are spread among a smaller asset base.
For the most part, closed-end fund companies report expenses ratios based on the fund's common assets only. However, the contractual management fees charged to the closed-end funds may be based on the common asset base or the total managed asset base.
The entry into long-term debt arrangements and reverse-repurchase agreements are two additional ways to raise additional capital for the fund. Funds may use a combination of leveraging tactics or each individually. However, it is more common that the fund will use only one leveraging technique.
Since closed-end funds are traded like stock, a customer trading them will pay a brokerage commission similar to one paid when trading stock (as opposed to commissions on open-ended mutual funds where the commission will vary based on the share class chosen and the method of purchasing the fund). In other words, closed-end funds typically do not have sales-based share classes where the commission and annual fees vary between them. The main exception is loan-participation funds.
Initial offering
Like a company going public, a closed-end fund will have an initial public offering of its shares at which it will sell, say, 10 million shares for $10 each. That will raise $100 million for the fund manager to invest. At that point, however, the fund's 10 million shares will begin to trade on a secondary market, typically the NYSE or the AMEXAmerican Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
for American closed-end funds. Any investor who wishes to buy or sell fund shares at that point will have to do so on the secondary market. Excluding exceptional circumstances, closed-end funds do not redeem their own shares. Nor, typically, do they sell more shares after the IPO (although they may issue preferred stock, in essence taking out a loan secured by the portfolio).
Exchange-traded
Closed-end fund shares trade continually at whatever price the market will support. They also qualify for advanced types of orders such as limit orders and stop orders. This is in contrast to some open-end funds which are only available for buying and selling at the close of business each day, at the calculated NAV, and for which orders must be placed in advance, before the NAV is known, and by simple buy or sell orders. Some funds require that orders be placed hours or days in advance.Closed-end funds trade on exchanges and in that respect they are like exchange-traded fund
Exchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
s (ETFs), but there are important
differences between these two kinds of security. The price of a closed-end fund is completely determined by the valuation of the market, and this price often diverges substantially from the NAV of the fund assets. In contrast, the market price of an ETF trades in a narrow range very close to its net asset value, because the structure of ETFs allows major market participants to redeem shares of an ETF for a "basket" of the fund's underlying assets.http://oyc.yale.edu/economics/financial-markets/content/transcripts/transcript-18-professional-money-managers-and This feature could lead to potential arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
profits if the market price of the ETF were to diverge substantially from its NAV. The market prices of closed-end funds are often ten to twenty percent higher or lower than their NAVs, while the market price of an ETF is typically within one percent of its NAV. Since the market downturn of late 2008 a number of fixed income ETF's have traded at premiums of roughly two or three percent to their NAV's.
Discounts and Premiums
As a secondary effect of being exchange-traded, the price of CEFs can vary from the NAV - an effect known as the closed-end fund puzzle. In particular, fund shares often trade at what look to be irrational prices because secondary market prices are often very much out of line with underlying portfolio values. A CEF can also have a premium at some times, and a discount at other times. For example, Morgan Stanley Eastern Europe Fund (RNE) on the NYSE was trading at a premium of 39% in May 2006 and at a discount of 6% in October 2006. These huge swings are difficult to explain.US closed-end stock funds often have share prices that are 5% or more below the Net Asset Value (NAV). That is, if a fund has 10 million shares outstanding and if its portfolio is worth $200 million, then each share represents a claim on that NAV of $20 and you might expect that the market price of the fund's shares on the secondary market would be around $20. But that's typically not the case. The shares may trade for only $19 or even only $17. In the former case, the fund would be said to be "trading at a 5% discount to NAV." In the latter case, the fund would be said to be "trading at a 15% discount to NAV."
The presence of discounts is also puzzling since if a fund is trading at a discount, theoretically a well-capitalized investor could come along and buy up all the fund's shares at the discounted price in order to gain control of the portfolio and force the fund managers to liquidate it at its (higher) market value (although in reality, liquidity concerns make this impossible since the Bid/offer spread will drastically widen as fewer and fewer shares are available in the market). Benjamin Graham
Benjamin Graham
Benjamin Graham was an American economist and professional investor. Graham is considered the first proponent of value investing, an investment approach he began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd through various editions of their famous book...
claimed that an investor can hardly go wrong by buying such a fund with a 15% discount. However, the opposing view is that the fund may not liquidate in your timeframe and you may be forced to sell at an even worse discount; but like any investment, these discounts could simply represent the assessment of the marketplace that the investments in the fund may lose value.
Even stranger, funds very often trade at a substantial premium to NAV. Some of these premiums are extreme, with premiums of several hundred percent having been seen on occasion. Why anyone would pay $30 per share for a fund whose portfolio value per share is only $10 is not well understood, although irrational exuberance has been mentioned. One theory is that if the fund has a strong track record of performance, investors may speculate that the outperformance is due to good investment choices by the fund managers and that the fund managers will continue to make good choices in the future. Thus the premium represents the ability to instantly participate in the fruits of the fund manager's decisions.
A great deal of academic ink has been spent trying to explain why closed-end fund share prices aren't forced by arbitrageurs to be equal to underlying portfolio values. Though there are many strong opinions, the jury is still out. It is easier to understand in cases where the CEF is able to pick and choose assets and arbitrageurs are not able to determine the specific assets until months later, but some funds are forced to replicate a specific index and still trade at a discount.
Comparison with open-ended funds
With open-ended fundsOpen-end fund
An open-end fund is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders...
, the value is precisely equal to the NAV. So investing $1000 into the fund means buying shares that lay claim to $1000 worth of underlying assets (apart from sales charges). But buying a closed-end fund trading at a premium might mean buying $900 worth of assets for $1000.
Some advantages of closed-end funds over their open-ended cousins are financial. CEFs don't have to deal with the expense of creating and redeeming shares, they tend to keep less cash in their portfolio, and they need not worry about market fluctuations to maintain their "performance record". So if a stock drops irrationally, the closed-end fund may snap up a bargain, while open-ended funds might sell too early.
Also, if there is a market panic, investors may sell en masse. Faced with a wave of sell orders and needing to raise money for redemptions, the manager of an open-ended fund may be forced to sell stocks he'd rather keep, and keep stocks he'd rather sell, because of liquidity concerns (selling too much of any one stock causes the price to drop disproportionately). Thus it may become overweight in the shares of lower-quality or underperforming companies for which there is little demand. But an investor pulling out of a closed-end fund must sell it on the market to another buyer, so the manager need not sell any of the underlying stock. The CEF's price will likely drop more than the market does (severely punishing those who sell during the panic), but it is more likely to make a recovery when the intrinsically sound stocks rebound.
Because a closed-end fund is on the market, it must obey certain rules, such as filing reports with the listing authority and holding annual stockholder meetings. Thus stockholders can more easily find out about their fund and engage in shareholder activism, such as protest against poor management. http://securities.stanford.edu/news-archive/2004/20040122_Headline08_McSherry.htm
Examples
Among the biggest, long-running CEFs are:- Adams Express CompanyAdams Express CompanyThe Adams Express Company is a publicly traded diversified equity fund that traces its roots to a 19th century freight and cargo transport company. The Company uses a conservative investment philosophy, and the portfolio is managed with the expectation that it will generate solid returns with...
(NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:ADX) - Foreign & Colonial Investment Trust plc (LSELondon Stock ExchangeThe London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
:FRCL) - Witan Investment Trust plc (LSELondon Stock ExchangeThe London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
:WTAN) - Scottish Mortgage Investment TrustScottish Mortgage Investment TrustScottish Mortgage Investment Trust is a publicly traded investment trust listed on the London Stock Exchange. It invests globally, looking for strong businesses with above-average returns. Scottish Mortgage is managed by Baillie Gifford & Co, the Edinburgh based investment management...
(LSELondon Stock ExchangeThe London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
:SMT) - Tri-Continental Corporation (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:TY) - Gabelli Equity Trust (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:GAB) - General American Investors Company, Inc. (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:GAM)
Newer CEFs include:
- Alpine Total Dynamic Dividend Fund (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:AOD) - Morgan Stanley China A-Share Fund (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:CAF) - John Hancock PATRIOT Fund (NYSENew York Stock ExchangeThe New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
:PDT)
See also
- Collective investment schemeCollective investment schemeA collective investment scheme is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group...
s for generic information. - Investment trustInvestment trustAn Investment trust is a form of collective investment found mostly in the United Kingdom. Investment trusts are closed-end funds and are constituted as public limited companies....
a UKUnited KingdomThe United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
closed-ended collective investment - Mutual fundMutual fundA mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
s for U.S.United StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
information. - Listed investment companys for AustraliaAustraliaAustralia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. - Open-end fundOpen-end fundAn open-end fund is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders...
External links
- SEC - US SEC description of investment company types
- CEFA - the Closed-End Fund Association (US)
- Investment Company Institute - the US association of investment companies
- AITC - the UK Association of Investment Trust Companies
- Australian Stock Exchange site - Australian LICs
- Control Premiums and Minority Discounts - a general article
- CEFConnect - Information on many US CEFs and screening tools. Sponsored by Nuveen (a major US CEF provider)
- M* Discussion Board - Morningstar's CEF Discussion Board Started October 1998