Arrrgh the f#*&$!@ financial industry is so intentionally opaque

[urn2bfree]

...CEF...use leverage and also buy illiquid investments. Most CEFs are invested in fixed income.

Can you replicate this on your own? Not really.

... To each his own, more than one road to Rome, and all that.

But what this means is the road is riskier...it generates yield like fixed income but if interest rates rise, good bye yield. And drop in NAV too. So it trades like a stock and carries the interest rate risk of a bond. I don't know why my mother should be in this when there are less riky alternatives.

 

[ESRwannabe]

But what this means is the road is riskier...it generates yield like fixed income but if interest rates rise, good bye yield. And drop in NAV too. So it trades like a stock and carries the interest rate risk of a bond. I don't know why my mother should be in this when there are less riky alternatives.

You should definitely get rid of them if you are uncomfortable with them.

Most people that buy CEFs buy them for the income and would not sell them unless they started to trade a very high premium to NAV. They are relatively illiquid which is why they often trade at a discount.

The FA probably bought them to generate consistent income, which they are very good for. As for interest rates, the CEF is not forced to buy and sell assets like an open ended fund. So I don't view gradual inflation as a problem. I also believe that the most likely scenario for the US is a stagnant economy similar to Japan ( (1)affects of baby boomer retirement have been postponed temporarily due to people chosing to delay retirement, (2) globalization is deflationary and will continue despite political changes, (3) extremely deflationary, wage destroying, technology is on its way via AI and robotics).

Anyway, you shouldn't have any trouble selling those CEFs.

 

[gcgang]

http://www.cefconnect.com/?utm_source=bing&utm_term=cefconnect&utm_campaign=CEF+-+CEF+Connect+-+Exact&utm_medium=cpc&utm_content=L3BPXqbo%7Cpcrid%7C5354502263%7Cpkw%7Ccefconnect%7Cpmt%7Cbe%7Cpdv%7Cm%7C

CEFCONNECT, what I tried to link above, is a good site for evaluating Closed End Funds.

Discounts to NAV are pretty low in general right now, so probably now is a decent time to sell.

 

[sengsational]

Since the individual stocks are not subject to fees, and you said much of it was invested for dividends, I'll check the expected yield on the stocks, and leave everything that's not wildly out of place in the portfolio.

I might find one or two funds with the largest values, pick a suitable replacement choice, multiply-out the difference in annual costs (generating a dollar figure) and suggest a swap. But the owner would have to say "yes, please help me get out of the expensive fund and into the cheaper fund", or I'd not do it.

 

[Bestwifeever]

After the OP figures out what the fees are, I'm thinking his conversation with Mom goes like this:

Mom: I like Uncle Bobby handling my money.
OP: But Uncle Bobby charges fees. You can make the same amount of money and not have to pay fees.
Mom: But if I make the same amount of money, it's okay with me if Uncle Bobby gets to keep the fees. He deserves it.
OP: <no answer>

 

[Tractor guy]

Are these jointly owned or were they in your father's name? If in your father's name, and in a taxable account, they will have a step up in basis which makes it very easy to move out of them if you do it soon.

I feel for you. I'm in a similar situation with my mother in law. Her husband put a bit of money into high expense ratio funds that I'd like to get her out of. However, figuring out the cost basis is going to be a real pain because he didn't keep the right records for 30 years, she doesn't need the money, and she's 91. I've not pushed it. The little bit of extra return we'll get over her expected life isn't worth the worry we'd cause her if we pushed her to change anything. I'd take different action if she was 10 years younger though.

 

[urn2bfree]

After the OP figures out what the fees are, I'm thinking his conversation with Mom goes like this:

Mom: I like Uncle Bobby handling my money.
OP: But Uncle Bobby charges fees. You can make the same amount of money and not have to pay fees.
Mom: But if I make the same amount of money, it's okay with me if Uncle Bobby gets to keep the fees. He deserves it.
OP: <no answer>

More like-
Me: OP: But Uncle Bobby charges fees. You can make the same amount of money and not have to pay fees. Which means You have MORE of your own money if you did not have to pay fees which are just going into his pockets instead of yours.

mom: wtf? That thieving b@$t@rd! ( not really, mom has mild dementia and will be fine with anything...it's the rest of the family that have to be dealt with)

 

[Bestwifeever]

More like-
Me: OP: But Uncle Bobby charges fees. You can make the same amount of money and not have to pay fees. Which means You have MORE of your own money if you did not have to pay fees which are just going into his pockets instead of yours.

mom: wtf? That thieving b@$t@rd! ( not really, mom has mild dementia and will be fine with anything...it's the rest of the family that have to be dealt with)

I know, wouldn't that be nice if Mom got it right away? I just imagine my dear late MIL (six figures with Edward Jones in her golden years, and that wasn't even a relative) feeling bad for poor Uncle Bobby who is always so nice and works hard for those fees.... Good luck with the rest of the family!