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Are there any fees associated with CEFs?
CEFs may charge management fees and other expenses, which can vary by fund. Additionally, when buying or selling shares on the stock exchange, you may incur brokerage commissions.
How do CEFs differ from mutual funds?
Unlike mutual funds, which continuously issue and redeem shares based on demand, CEFs have a fixed number of shares. After the initial offering, shares of a CEF are bought and sold on the open market, which can lead to them trading at a premium or ...
What are the risks associated with CEFs?
Investing in CEFs involves risks similar to those of other securities, including market volatility, interest rate risk, and the risk associated with the underlying assets. Additionally, the possibility of shares trading at a discount to NAV can add ...
How are UITs taxed?
The taxation of UITs can be complex and depends on the type of securities held by the trust and the investor's personal tax situation. Generally, investors are subject to taxes on income distributions and capital gains. It's recommended to consult a ...
How are CEFs priced?
The market price of a CEF is determined by supply and demand in the market and can differ from the fund's NAV. This difference can result in the fund trading at a premium (price above NAV) or a discount (price below NAV).