Closed-End Bargains Beckon

Many of these funds are selling at a deep discount. Here are three good buys for growth or income.

Bruises from the market's big punches are still evident on closed-end funds. Unlike regular mutual funds, closed-ends issue a set number of shares and trade like stocks on exchanges. Closed-ends' share prices have been about two to five times as volatile as their underlying assets during the recent market turmoil, says Gregory Neer, an analyst with Stifel Nicolaus, an investment firm.

The share price of a closed-end fund can sell at premium or discount to the net asset value per share of the fund's own holdings. Usually, closed-end funds trade at a small discount to their NAV (you can see this at Web sites such as and During the past five years, these discounts have narrowed or disappeared as investors snapped up the high dividend yields offered by many closed-ends.

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Contributing Editor, Kiplinger's Personal Finance