Attractive Closed-End Funds CEF List

CEFs list - updated on 7/17/2010

In my previous article about Closed-End Fund (CEF), I have discussed some background about CEF. So, you might be asking what type of Closed End Fund (CEF) you should buy such as Municipal Bond CEF, Equity CEF, Growth Stock CEF and High dividend Stock ETF. 

I have compiled the following list for your reference. As noted before I have been using cefconnect website to research and find out about the funds. I have chosen the funds based on expense ratio, total asset, dividend/distribution, well-known provider and credit rating (bond).

Attractive Closed End Funds

(click column header to sort results)
Type  
Fund  
Ticker  
Category  
Dividend  
Assets  
Expense Ratio  
Premium/Discount  
Bond
BlackRock Invst. Quality Muni
BKN
Nat. Municipal
7.00%
0.37B
0.52%
5.11%
Bond
Invesco Quality Muni Income
IQI
Nat. Municipal
6.64%
0.52B
1.12%
-1.68%
Bond
Nuveen CA Div Adv Muni 3
NZH
CA Municipal
6.74%
0.52B
0.51%
1.06%
Bond
Invesco Quality Muni Income
IQC
CA Municipal
6.22%
0.17B
1.08%
-7.72%
Stock
Eaton Vance Tax Man. Global
EXG
Covered call
14.63%
3.00B
1.04%
-5.51%
Stock
Eaton Vance Tax Adv Global Div
ETG
World Stock
9.64%
1.30B
1.92%
-6.86%
Stock
Alphine Global Dynamic Fund
AOD
World Stock
12.20%
1.40B
1.47%
-2.52%

List of attractive Closed End Funds:

1. BKN - BlackRock Investment Quality Muni, Bond, National Municipal

2. IQI - Invesco Quality Muni Income, Bond, National Municipal

3. NZH - Nuveen CA Div Adv Muni 3, Bond, California Municipal

4. EXG - Eaton Vance Tax Man. Global, Stock / Equity, Covered Call

5. ETG - Eaton Vance Tax Adv. Global Dividend, Stock / Equity, World Stock

6. AOD - Alphine Global Dynamic Fund, Stock / Equity, World Stock

How do you find this list?

So, the following is my sorting criteria:

1. Expense ratio is lower than 2.0%. Typically, 0.4%-2.0% is a good indicator for CEF. We don’t want fund management eat into our profit, do we?

2. Total Net Asset is higher than 0.10Billion (>100 million). High Total Net Asset will guarantee the fund is liquid and widely trade in secondary market such as NYSE or AMEX. Low Total Net Asset will cause illiquid fund. Typically, illiquid fund is very difficult to trade and the buy/sell spread can be very high.

3. The fund is traded at discount or close to Net Asset Value (NAV). Usually, this mean the premium/discount is in negative value (i.e. -2.00%). Slight premium to NAV is fine (<4%).

5. High and constant dividend/distribution payment during the life of the fund. I usually prefer a monthly dividend CEF. This mean the fund distribute dividend monthly rather than quarterly. There is no Return of Capital (ROC) in the dividend/distribution. ROC is essentially a return of your capital and will degrade the Total Net Asset over time (i.e. Total Net Asset goes to zero or CEF is dissolved early).

6. The fund composition is very liquid and consists of well known company like McDonalds, GE, etc for equity/ stock fund.

7. Credit rating for bond composition is in good quality (average A+). Less than 25% junk bond rating.

How can I buy CEFs?

You can purchase it through your brokerage such as Just2trade, sharebuilder, optionshouse, etrade, schwab, TD Ameritrade, ThinkorSwim (TOS), etc

Tips on buying CEF:

  • Always buy with a LIMIT order. Never place any Market Order unless the fund is widely traded (i.e. trading volume is high and bid/sell spread is very little).
  • Be patient on your order. CEF bid/sell spread can be very volatile during the day trading.
  • Find a good brokerage. A discount brokerage is desirable if your capital is small. We don’t want to pay high commission to the brokerage firm.

Note: All the above information is updated as 7/17/2010. Please check specific information if you are planning to buy any of above CEFs after 7/17/2010.

Disclaimer: I’m Long IQI, IQC, ETG, AOD.

I really appreciate any comments you leave! Thanks!

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Comments 2 comments

Slim 5 years ago

What's the quickest way to determine zero ROC? Thanks.


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

check cefconnect or cefa website, you can instantly get ROC information. You can also get EPS and current distribution to determine the possibility of the dividend being cut or increase in near future.

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