A Wise Entry to Closed-End Funds

It's not easy to navigate closed-end funds. Best to let RiverNorth's Oaktree High Income steer the ship.

You often hear closed-end funds touted as a way to buy a dollar's worth of assets for 85 cents. This they sometimes are. But CEFs are much more complicated than the slogan suggests. Unless you're an especially savvy — and long-term — investor, you probably should avoid them. What's more, most income-oriented CEFs — which represent the bulk of the CEF universe — are overpriced just now. But read on, and I'll also tell you about a choice new income fund.

Most CEFs are thinly traded, so they're largely the province of individual investors. But some hedge funds and a few mutual funds also troll these waters. I just had a long conversation with Patrick Galley, chief investment officer of RiverNorth, which runs several funds that specialize in CEFs. Take it from me; you don't want to be on the other side of a CEF trade with Galley.

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Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.