Interesting strategy and one that I've considered myself. Buy Closed End Funds (CEF's) that are trading at a steep discount to NAV. Own them as the market price (hopefully) returns to the NAV. Many of the CEF's mentioned in this article are trading at a 10-15% discount to NAV.
I'm looking at UTF (trading at ~15% discount to NAV). I need to find a good utility fund for a work-related purpose, and even though UTF charges 1.3% ER, I figure it might be worth the cost to get some utilities at 15% off, and close to a 5% dividend yield. I know I can get a Utilities index ETF close to NAV from vanguard for .25% ER, but this may not be an option for other work-related reasons (don't ask :
I've skimmed through the 2006 shareholder report and there are some issues I'll have to dive into further (leverage structure/interest rate risk, payout ratio income vs dividends, etc.).