Description

This article is from the A Guide to Closed-End Funds (CEFs).

Potential Disadvantages of Investing in CEFs

We would be remiss if we did not mention some of the potential problems of investing in CEFs. The same differences discussed above may pose additional risks or disadvantages for investors in CEFs: shrinking premium, volatility, liquidity, and commision costs. We evaluate these risks and disadvantages, and argue that they may, in fact, provide better opportunities for the savvy investor.

 

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• prev: Premium/Discount of the Mexico Equity & Income Fund
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