What Are The Risks And Rewards Of Closed-End Bond Funds?

Topics:
Investment Strategy
Tags:
Benefits,
Personal Finance,
Mutual Funds,
Mutual Fund,
Investment,
Human Resources,
Fund,
Fixed Income,
Financial Services,
Finance,
...
Source:
Charles Schwab

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Overview: Recent turmoil in the credit markets has brought attention to closed-end bond funds, a less well-known relative to more common open-end mutual funds. Unlike open-end funds, closed-end funds take in a certain amount of cash when they're created and then trade like stock on a major exchange. Many have been beaten down in price - some even worse than regular mutual funds - creating some risks, but also opportunities, for investors seeking to add some kick to their fixed income portfolios. Other types of closed-end funds include dividend-paying stock funds, preferred stock, hard assets, and Rreal Estate Investment Trusts (REITs), though bond funds make up more than 70% of the current market. Regardless, the same principles apply.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: HTML | Date: Feb 2009 | Pages: 6


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