Closed-end funds (CEFs) are one of investment funds available for investors. This fund can provide an attractive choice for you to get income and capital growth. These CEFs are traded like stocks during intraday trading. You can buy and sell these funds using your brokerage account.
Note: Brokerages: TD Ameritrade, Schwab, Lightspeed, Zecco, Scottrade, etc.
Most of these closed end funds are managed actively by the fund manager. It may trade either at a discount or premium to its NAV. Currently there are more than 600 closed end funds across various classes. Some of the fund classes are: covered call, core stock, growth stock, value stock, preferred stock, real estate stock, global stock, emerging market stock, convertible, corporate bond, emerging markets bond, mortgage bond, municipal bond, high yield municipal, etc.
Best Closed End Funds
These top closed end funds are chosen based on its performance, expense ratio, fund management, holding turnover. More review can be found below.
The top 10 best closed end funds for 2012 and 2013 are:
- PIMCO Corporate & Income Opportunity (PTY)
- Templeton Global Income (GIM)
- PIMCO High Income (PHK)
- DWS Municipal Income Trust (KTF)
- Central GoldTrust (GTU)
- PIMCO Global StocksPLUS & Income (PGP)
- TCW Strategic Income (TSI)
- John Hancock Tax-Advantage Dividend Income (HTD)
- First Trust / Aberdeen Emerging Opportunities (FEO)
- Nuveen Global Value Opportunities (JGV)
This PIMCO Corporate & Income Opportunity fund objective is to provide high current income and capital appreciation. This closed end fund utilizes its assets to buy corporate debts and other company income producing bonds. The fund manager is William H Gross (typically known as Bill Gross). This fund is previously known as PIMCO Corporate Opportunity Fund.
|PIMCO PTY fund|
During 2008, this fund has a total return of -12.82%. This investment grade taxable bond fund has returned 39.22% over the past 3 year, and 15.11% over the past 5 year. As of December 2012, the annual holding turnover rate is 53%.
As of March 2012, the top 5 sectors include corporate debt (52%), long term municipal bond (19%), mortgage backed securities bond (13%), preferred shares (5.3%), and short term debt (4.7%). The top 4 country allocations are USA (73.45%), United Kingdom (8.65%), Brazil (2.2%), and Netherlands (2%).
2. Templeton Global Income (Ticker: GIM)
This Templeton Global Income fund is investing majority of its assets in income producing securities including US and foreign entities, including emerging markets. The fund managers are Michael Hasenstab and Sonal Desai. Its yield is 5.72%.
The 5 year annualized return is 11.83%. This best closed end fund is ranked 4 stars rating by Morningstar. It has one of its best returns in 2006 with 31.17%.
This global income closed end fund has an average duration of 2.76 years. The average maturity is 4.49 years. There are 132 holdings. The top 3 holdings are Institutional Fiduciary Trust Money Market, Korea Treasury Bond, and Government of Indonesia FR31 bond.
3. PIMCO High Income (PHK)
The investment objective of PIMCO High Income is to achieve high income with capital growth by investing in corporate debt. Similar to PIMCO Corporate & Income Opportunity fund, this high yield bond fund is managed by Bill Gross. The market value is $1.5 billion. Its total leverage ratio iis 29.53%.
The current distribution rate is 11.15%. The market shares often trade at a premium to NAV (i.e. currently 67% premium). This CEF has returned 33.84% over the past 3 year, and 13.05% since its inception. It is rated with 3 stars.
As of January 2012, the top 5 sectors are non-captive con. finance (17%), insurance life (17%), banks (14%), electric utility (8%), and non-captive div. finance (4%).
4. DWS Municipal Income Trust (KTF)
|DWS Municipal Income|
Top California Municipal Bond Closed End Funds 2012
The yield of this muni bond fund is 6.03%. It is paid on monthly basis. The expense ratio is 1.23% per year. This best closed end fund is rated with 5 stars rating. During 2011, it has an annualized return of 29.09%. The average coupon is 6.95%. The average credit quality is A (investment grade).
5. Central Gold-Trust (GTU)
This Central Gold-Trust fund is a closed end fund invests mainly in gold bullion. The market value of this gold fund is $993 million. It is non-leverage CEF. Its inception date is September 22, 2006. The fiscal year end is December 31st. It has an annual expense ratio of 0.40%. It has bronze rating for its performance.
6. PIMCO Global StocksPLUS & Income (PGP)
This PIMCO Global StocksPLUS & Income fund uses majority of its assets to invest in equity index derivative instruments based on the S&P 500 and MSCI EAFE indices. It may use an option strategy. Daniel J Ivascyn is the lead manager.
Rated with 3 stars, it has 2.81% expense ratio. This Allianz Global Investors Fund is introduced to investor on May 31, 2005. The distribution rate is 10.57%. It has returned 36.14% over the past 3 year, and 13.12% over the past 5 year.
As of January 2012, the top 5 country allocations include USA (99.73%), UK (2.94%), Netherlands (1.07%), Luxembourg (1.03%), and British Virgin Islands (0.95%). The average maturity is 4.25 years. IT also has 331 holdings in its assets.
7. TCW Strategic Income (TSI)
This TCW Strategic Income fund utilizes its assets to purchase convertible bond, taxable bonds, mortgage backed securities, asset backed securities, and money market fund. This multisector closed end fund has total net assets of $290 million.
This best CEF has a dividend yield of 6.68%. Its total expense ratio is 1.26%. Moringstar has ranked this TCW fund with 4 stars. The annual portfolio turnover rate is 40%. As of April 2012, it also has 315 holdings.
As of January 2012, the top 5 sectors are collateralized debt (65.22%), long term corporate debt (20.59%), asset-backed securities (10.31%), general equity (1.27%), and derivative (1.29%).
8. John Hancock Tax-Advantage Dividend Income (HTD)
Morningstar has rated this John Hancock CEF with 4 stars and Silver rating. This top performer CEF has return 36.03% over the past 3 year, 6.56% over the past 5 year, and 7.69% since its inception. Currently, the fund is trading 8.63% discount to net asset value (NAV).
This HTD fund has an annual portfolio turnover rate of 16%. As of February 2012, the top 5 stocks in its holdings are Wells Fargo & Co preferred, Spectra Energy Corp, OGE Energy Corp, Progress Energy Inc, and Integrys Energy Group Inc. The top 4 sectors include utilities (58%), financials (24%), energy (10.5%), and telecommunication service (5%).
9. First Trust / Aberdeen Emerging Opportunity (FEO)
This First Trust / Aberdeen Emerging Opportunity fund is managed by Max Wolman since 2006. It invests in emerging market securities. The total net assets are $121 million. Its expense ratio is 1.68%. The top 3 sectors are general equity (42%), foreign government debt (40%), and foreign corporate debt (16%).
10. Nuveen Global Value Opportunities (JGV)
The investment objective of Nuveen Global Value Opportunities fund is to provide high total return level. It uses its assets to purchase a diversified global portfolio of value stocks and corporate & government bonds. The expense ratio of this best CEF is 1.16%. The year to date return is -9.30%.
As of April 2012, the top 5 sectors include metals & mining; oil, gas & consumable fuel; electric utilities; diversified telecommunication; and communications equipment. The top 5 stocks in its portfolio are Barrick Gold Corp, Wal-Mart Stores Inc, Gold Fields Ltd ADR, Newmont Mining Corporation, and AngloGold Ashanti Limited ADR.
Disclosure: No Position