Closed end mutual funds are a lot like conventional, open-ended mutual funds. They hold a diversified portfolio of stocks, chosen by a fund manager who gets a fee for his or her services. The key difference is that open-ended funds stand ready to sell new fund units, or redeem existing fund units, on demand.
Closed-end funds work with a fixed asset base, invested in a portfolio of securities. The value of their assets rises and falls, depending on how they invest. Their units trade like stocks, and mostly on a stock exchange. Their units may trade above the per-unit value of the investments they own—“at a premium” to net asset value, as brokers say. Mostly, they trade at a discount.
If a broker sells you a closed end mutual fund, they charge you a commission (individual brokers get to keep perhaps a third of the fees and commissions they bring in.) But the broker won’t earn another dime on that asset until you sell, possibly many years later.
On the other hand, if a broker sells you a conventional mutual fund, the broker can earn a steady stream of yearly trailer fees. Sometimes they get an immediate back-end load of up to 6% of your investment.
Closed ended funds are just one of the many security vehicles at your disposal. Control your stock-trading risk by following TSI Network and using our three-part Successful Investor strategy:
Get the complete guide to Investing in Canadian ETFs—learn how to get the maximum returns from your ETF investments. Download Best Canadian ETFs, Canadian ETFs vs Mutual Funds, Canadian Index Funds and More: The Rewards and Risks of Canadian ETFs for FREE.
A: Canoe EIT Income Fund, $12.07, symbol EIT.UN on Toronto (Units outstanding: 89.3 million; Market cap: $1.1 billion; www.canoefinancial.com), changed its name from EnerVest Diversified Income Trust in November 2013. The stock symbol is unchanged.
Canoe EIT is a closed-end fund that invests in a portfolio… Read More
A: The PIMCO Corporate & Income Opportunity Fund, $18.40, symbol PTY on New York (Units outstanding: 81.1 million; Market cap: $1.5 billion; www.pimco.com), is a closed-end fund that invests in a variety of corporate debt obligations and the income-producing securities of non-corporate issuers. They include… Read More
A: Cymbria Corp., $56.00, symbol CYB on Toronto (Shares outstanding: 22.6 million; Market cap: $1.3 billion; www.cymbria.com), is a closed-end fund that invests in a portfolio comprised largely of publicly traded stocks.
Separately, the fund owns 20.7% of EdgePoint Wealth Management, a private firm that sells… Read More
A: Canoe EIT Income Fund, $11.93 symbol EIT.UN on Toronto (Units outstanding: 90.1 million; Market cap: $1.1 billion; www.canoefinancial.com), changed its name from EnerVest Diversified Income Trust in November 2013. The stock symbol remained the same.
Canoe EIT is a closed-end fund that invests in a.. Read More
A: Aberdeen Asia-Pacific Income Fund, $4.53, symbol FAP on Toronto (Units outstanding: 52.3 million; Market cap: $236.9 million; www.aberdeen-asset.ca), is a closed-end fund that invests in foreign currency bonds—mostly from Australia and Asian countries. The fund’s MER is 1.11%.
Closed-end funds are a lot like conventional,… Read More
A: Liberty All-Star Equity Fund, $5.22, symbol USA on New York (Units outstanding: 186.8 million; Market cap: $975.1 million; www.all-starfunds.com), is a closed-end fund that aims to combine the stock recommendations of three value-style and two growth-style investment managers.
The fund started up on October 31,… Read More
Brookfield Global Infrastructure Securities Income Fund, $6.48, symbol BGI.UN on Toronto (Units outstanding: 34.4 million; Market cap: $222.9 million, www.brookfieldim.com), is a closed-end fund that holds publicly traded global infrastructure companies.
The fund first sold units at $10 each to the public and began trading… Read More
Generally, we think ETFs are a cheaper alternative to mutual funds. They’re also a way for Canadian investors to track international indexes. Here are two Vanguard ETFs we see as low-fee buys.
Pennsylvania-based Vanguard Group is one of the world’s largest investment… Read More
The Direxion iBillionaire Index ETF tries to reproduce the investments of Warren Buffett and other billionaires. But that could lead to buying stocks they once had and no longer hold.
THE DIREXION IBILLIONAIRE INDEX ETF (symbol IBLN on New York; www.direxioninvestments.com)… Read More
Closed-end mutual funds can offer “stocks at a discount,” but you won’t likely hear about them from your broker.
Given their pluses, it’s a wonder why brokers so rarely recommend closed-end funds. There’s a simple reason for this: while closed-end mutual funds can benefit individual… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.
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We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
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We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
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Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
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Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
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