Closed-end stock funds, although popular during the 1980s, have slowly atrophied. Today, there are only 30 diversified domestic equity funds, many of them tiny, trading only a few hundred shares a day, with high expenses and weird strategies.
Research by closed-end fund expert Donald Cassidy of Lipper Inc. reinforces Graham's earlier observations: Diversified closed-end stock funds trading at a discount not only tend to outperform those trading at a premium but are likely to have a better return than average open-end mutual fund.
Sadly, however, diversified closed-end stock funds are not always available at a discount in what has become a dusty, dwindling market.
However, they are generally not suitable for investors who wish to add money regulary, since most brokers will charge a separate commission on every new investment you make.
- The Intelligent Investor, Benjamin Graham
- The Intelligent Investor, Benjamin Graham
