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Old 12-30-2009, 04:27 PM   #1
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This is an oddball creature that I find interesting. It is a closed end fund (CEF) which has as its stated strategy buying shares of other CEFs that are believed to be undervalued. Reading management letters, it appears that they stay diversified, but pick their bets to try to buy CEFs holding assets they find attractive and which trade at a wider than usual discount to NAV. Since FOF usually trades at a discount itself, you end up getting two layers of discount (and two layers of fees). I have been thinking about a small position in this thing. Any thoughts?
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Old 12-30-2009, 05:06 PM   #2
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Interesting idea. Seems like a strategy that should work over time as the FOF buys those disfavored CEFs trading at the steepest discounts to NAV and as the price approaches NAV, rotates that money into more steeply discounted CEF's.

One negative I can see is that their expense ratio is almost 1%, and the underlying funds also have expense fees that may be 1+%.
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Another question about CEF's
Old 01-14-2010, 08:37 AM   #3
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Another question about CEF's

I am thinking of putting some money in GIM. Is there any better fund in this category?
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Old 01-14-2010, 08:45 AM   #4
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GIM was trading at a premium to NAV last time I looked. I would not be eager to buy now.
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Old 01-14-2010, 01:34 PM   #5
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I noticed NGZ / CNV mentioned on Fund Alarm. Management looks a little green to me.
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