Attractive Opportunity in Closed-End Funds
Why Closed-End Funds Today? Many closed-end funds (CEFs) are utilized by investors as income-generating vehicles and are, we believe, worth considering given many investors’ strong appetite for investments that offer income/cash flow coupled with the added benefit of potential capital appreciation.
Selecting a CEF for investment requires significant time and research. Utilize AAM’s expertise to invest in a diversified, professionally selected portfolio. AAM’s Tactical Income Closed-End Portfolio is comprised of our highest conviction ideas from various asset classes and geographic markets. It is selected utilizing a multi-factor approach based on yield, performance and premium/discount to net asset value (NAV) when compared to its peers and historic average.
Because a CEF’s shares trade in the market based on investor demand, the CEF may trade at a price higher or lower than its NAV. A CEF with a share price higher than its NAV is said to be selling at a “premium” to the NAV. A CEF with a share price lower than its NAV is said to be selling at a “discount” to the NAV. For example, if a CEF has an NAV of $100, based on the current value of its portfolio, but is priced at $90, it is said to be selling at a 10% discount to NAV.