I have a few CEF's in the retirement portfolio, spread out in some small-percentage categories I want to keep for a broad asset allocation.
You can run screens here:
CEFA - Closed-End Fund Association
CEFConnect - Brought to you by Nuveen Closed-End Funds
Do your research and watch out for some gotchas that make CEF investing tricky.
- Many (most?) CEF's have high management fees.
- High discounts to NAV can be a value trap. While discounts have generally been narrowing during the market rally of the past few months, you may have to wait a long time for the discount to narrow on a particular CEF.
- Many are thinly traded, so be sure to use a limit order when you buy.
- Look at the income portion of the dividend payout, not just the posted dividend percentage rate. Many CEF's show a high nominal yield but a closer look shows a big chunk is actually a return of capital.
Search the forum for "CEF" and you'll find several threads on the subject.
One CEF I am continuing to buy as part of my fixed income allocation is TSI. It shows up in the screens as a fixed income or bond fund but it's really a more specialized MBS fund. I started buying last year when it showed up on a screen with high discounts, but didn't seem to have red flags otherwise. (The discount has since narrowed.)
The sponsor's web site should still have a link to the fund manager's web conference earlier this year. I was impressed on two levels. First was the fact that the fund / management company for the relatively small fund made the effort to go beyond just publishing a prospectus and return table. More importantly, I thought the manager showed a good grasp on market dynamics that could affect his investment strategy.