CEF Holdings --- July 2026

[dickoncapecod]

You are absolutely correct. ETFs are a good example. However, unlike CEFs they have a mechanism through authorized market makers using what are called creation units to drive the difference between the NAV and the price to a relatively small differential. This works well for ETFs dealing in highly liquid securities like VOO. For ETFs dealing in less liquid securities like ORR, the difference can be more than one percent.
I like mutual funds which only trade after the close at their NAV. Not so exciting, but at least you don't have to worry about getting the best or worst price for the day. Of course, even then the NAV is an educated guess for funds like EGRIX which trade in less liquid worldwide securities.

What is seldom mentioned about traditional mutual funds is the substantial risk that follows from the complete lack of intraday liquidity. One can place a buy order during the day at when the price is 100 but end up paying 103 --- the NAV at the close. OR place a sell order when the market is at 100 but end up getting 97 when the NAV is struck. Unless you transact right on the close, your actual trade price may differ significantly from your intent.
Regards, Dick

 

[DrVenture]

Bought 3400 PAXS @ $14.68

 

[DrVenture]

What is seldom mentioned about traditional mutual funds is the substantial risk that follows from the complete lack of intraday liquidity. One can place a buy order during the day at when the price is 100 but end up paying 103 --- the NAV at the close. OR place a sell order when the market is at 100 but end up getting 97 when the NAV is struck. Unless you transact right on the close, your actual trade price may differ significantly from your intent.
Regards, Dick

Yes, that certainly can happen. I tend to place buy orders on days when the specific sector that I am interested in is in the red. And the opposite for sell orders. I used to have few other options, as I worked nights and had to sleep sometime. lol

Rarely, I was unpleasantly surprised. But, it did happen.

 

[DrVenture]

Two questions on ROC:

1. Do the tax benefits apply when receiving distributions from a TIRA, given that TIRA distributions are always characterized as ordinary income?

2. Assuming a taxable account for reasons of simplicity (see question 1), how/does the ROC circumstances impact selling shares beyond monthly distributions, or dis that moot in a tax sense?

 

[PaulR888]

AIMING --
I'm a little conflicted how I might respond because I've had similar conversations with an elderly family member too frightened to invest at all. But just because I'm out there loudly braying CEFs aren't B&H instruments for me doesn't mean some funds couldn't be appropriate B&H for someone else.

Good news, several very good CEFs are far off their old premium prices right now and have now slipped down into possible bargain territory. Maybe a little perspective helps -- these same funds have been paying monthly distributions for a long time with no or minimal changes for years. .AND what they are paying appears quite in line what they are earning.
Now earnings rates rise and they fall. Right now, for example, BGX and WDI appear to be fully earning their payouts, but I wouldn't make any predictions for 2027 or 2028.
OTOH PFN and PTY have been reliable monthly payers for years now and IMO PFN is about as conservative a CEF paying over 10% as you're going to find. I'd have little problem suggesting it to my elderly cousin as a good place to invest and forget. Is there a risk? Well, of course, but I believe it's a quite reasonable one -- something that thousands of retirees live with comfotably as their dividends keep rolling reliably in.
By all means, read and learn about CEFs -- but I respectfully suggest you're NEVER going to arrive at a place where you can say, "AHA! NOW I understand CEFs and can go forth to invest confidently!" These are complicated little structures and what you see on the surface is often a long ways from the whole picture.
To my cousin I have also suggested a 90/10 portfolio of PFN/GGN because she is fearful of inflation so I gave her the 10% in GGN's gold and natural resources. (She's still on the fence, still uninvested, getting about 2% from her bank.)
OK. Here's a practical suggestion for a confidence builder. Pick any two AI sites you like and ask them both this exact question: ARE DISTRIBUTIONS OF THE PFN FUND SUSTAINABLE? Or plug in any other fund you like. Compare your answers. Good luck.

Below: from Schwab: a longer term chart for PTY showing consecutive monthly payments and showing how price has slipped back near its previous lows. (The PFN chart looks quite similar.)

View attachment 64788

Hi Richard ... I respect you as a smart, long time contributor but but but are you suggesting to your cousin, an elderly person too frightened to invest at all, to put 90% of their money into PFN?

Edit: PFN lost 17.5% in 2022. How would your cousin react to that?

 

[PaulR888]

What is seldom mentioned about traditional mutual funds is the substantial risk that follows from the complete lack of intraday liquidity. One can place a buy order during the day at when the price is 100 but end up paying 103 --- the NAV at the close. OR place a sell order when the market is at 100 but end up getting 97 when the NAV is struck. Unless you transact right on the close, your actual trade price may differ significantly from your intent.
Regards, Dick

Hi Dick ... For my liquid assets, I include actively managed open end bond MFs which have a long history and which I intend to hold for lifetime. I've been investing in them a very long time. Of all the risks for me to worry about, getting closing day price has never been an issue for me.

 

[richardsok]

Hi Richard ... I respect you as a smart, long time contributor but but but are you suggesting to your cousin, an elderly person too frightened to invest at all, to put 90% of their money into PFN?

Paul With her mindset, I'm trying to deal with what is realistic here. We're WAY past growth notions. She is particularly afraid of stocks and she also could use income. Even if I could persuade her into SCHD or VTV, at the first 3% dip, she'd screech bloody murder. So I am suggesting WHATEVER SHE IS WILLING TO WITHDRAW FROM THE BANK, be it 10, 20 or 50% of her available cash, put 90/10 PFN/GGN to enjoy the extra income and give herself a goal of taking her daughter on a cruise with the first month or two extra that she earns. "Europe is lovely in the Auumn, Janie. Invest in PFN now and you and Becky could be sailing down the Rhine by November -- and you wouldn't have to take a dime out of the bank." (PS: She LOVES gold. GGN is just another carrot I suggest.)

"Charlie worked all those years, Janie! He's gone now, so let your money work for you."

So far: no dice.

Below: PFN stretching all the way back to the wild days of Covid, yielding 12% all the while. Could you ask for anything steadier for a retiree?

 

[FD1000]

What is seldom mentioned about traditional mutual funds is the substantial risk that follows from the complete lack of intraday liquidity. One can place a buy order during the day at when the price is 100 but end up paying 103 --- the NAV at the close. OR place a sell order when the market is at 100 but end up getting 97 when the NAV is struck. Unless you transact right on the close, your actual trade price may differ significantly from your intent.
Regards, Dick

It depends. I used mostly mutual funds to hold longer-term, but traded ETFs/CEFs very seldom. In bondland, unique bond funds are much better than bond ETFs.

When I think the risk is elevated, I don't hesitate to sell. Over the years I've found that many lower-volume ETFs and CEFs, PDI is a good example compared with SPY or QQQ, can decline much more sharply in a short period of time.

I've also noticed that ETFs like HYG and HYD sometimes fall 50% to 70% more during the trading day than comparable mutual funds in the same category. When I see that happen, I sell immediately.

That typically doesn't happen with highly liquid ETFs like SPY and QQQ. Their prices may temporarily deviate during periods of market stress, but usually only for seconds or a few minutes before they normalize.

In the past, I've taken advantage of those panic-driven dislocations for short-term trades. In fact, that's about the only time I'll buy riskier assets.

For example, last year PDI dropped more than 15% in just two days, while SPY and QQQ held up much better. I bought PDI the following day, expecting the discount to narrow.
see What is your best idea for investing today

 

[dennis5502]

Is there a sticky or Youtube video for a CEF newbie can get a better foundation on learning and investing in CEFs? I check the thread every so often, but not knowledge to invest $100k in a few Pimco options. I see that comment, CEFs are not a buy and hold option, and that's my primary means of investing, but approaching the decision of leaving W2 position in 1 - 2 years. TIA

I began investing in CEFs about 4 years ago. During my investigation process I found a 48 page monograph published in 2015 on Morningstar the explained the mechanics of CEFs. I know it still exists to subscribers to Morningstar. I agree with the other comments here that the best experience comes by starting small. I continue to return to the M* monograph sections on good/bad return of capital and leverage. I approach CEFs for income and capital preservation with a focus on the Pimco funds.

 

[COcheesehead]

Two questions on ROC:

1. Do the tax benefits apply when receiving distributions from a TIRA, given that TIRA distributions are always characterized as ordinary income?

2. Assuming a taxable account for reasons of simplicity (see question 1), how/does the ROC circumstances impact selling shares beyond monthly distributions, or dis that moot in a tax sense?

1. Not a tax accountant, but no on 1. What comes out is what you’re taxed on, not what happens inside the IRA.
2. The ROC reduces your cost basis and therefore may increase your capital gain upon the sale of shares. The ROC itself is not taxed as income since you are just getting your money back.

 

[PaulR888]

Paul With her mindset, I'm trying to deal with what is realistic here. We're WAY past growth notions. She is particularly afraid of stocks and she also could use income. Even if I could persuade her into SCHD or VTV, at the first 3% dip, she'd screech bloody murder. So I am suggesting WHATEVER SHE IS WILLING TO WITHDRAW FROM THE BANK, be it 10, 20 or 50% of her available cash, put 90/10 PFN/GGN to enjoy the extra income and give herself a goal of taking her daughter on a cruise with the first month or two extra that she earns. "Europe is lovely in the Auumn, Janie. Invest in PFN now and you and Becky could be sailing down the Rhine by November -- and you wouldn't have to take a dime out of the bank." (PS: She LOVES gold. GGN is just another carrot I suggest.)

"Charlie worked all those years, Janie! He's gone now, so let your money work for you."

So far: no dice.

Below: PFN stretching all the way back to the wild days of Covid, yielding 12% all the while. Could you ask for anything steadier for a retiree?


View attachment 64790

I hear you. Steady income but if she reads the financial statements the price volatility will be hard to deal with. I knew a financial advisor that had a sister much like your cousin. He steered her into an annuity of some kind. I hate annuities but the right one may fit a very risk averse person. Good luck, Thanks for explaining your rationale but I am still shaking.

 

[DrVenture]

1. Not a tax account, but no on 1. What comes out is what you’re taxed on, not what happens inside the IRA.
2. The ROC reduces your cost basis and therefore may increase your capital gain upon the sale of shares. The ROC itself is not taxed as income since you are just getting your money back.

I suspected there might be more moving parts to this and you have confirmed that. Thanks.

 

[AudiDudi]

Bought a little KIO before it goes ex on the 10th.

 

[dickoncapecod]

Two questions on ROC:

1. Do the tax benefits apply when receiving distributions from a TIRA, given that TIRA distributions are always characterized as ordinary income?

2. Assuming a taxable account for reasons of simplicity (see question 1), how/does the ROC circumstances impact selling shares beyond monthly distributions, or dis that moot in a tax sense?

1. As you say, IRA distributions are ordinary income.
2. ? ROC is an issue relevant to the tax basis characterization of distributions. Investor behavior moves prices. ? Perhaps you are referring to the fact that ROC is tax deferred rather than avoided forever. 8937 forms specify 1) the final amount of distributions that are tax basis ROC AND 2) specify how vendors must adjust the price basis of your holdings downward. In a taxable account, you WILL (probably) be taxed at your gains rate on deferred ROC because your basis has been adjusted downward. Some tax-focused folks care about all this. I pay no attention to it. Tax deferral has a variable benefit based on holding period and one's marginal tax rate.
Regards, Dick

 

[dickoncapecod]

It depends. I used mostly mutual funds to hold longer-term, but traded ETFs/CEFs very seldom. In bondland, unique bond funds are much better than bond ETFs.

When I think the risk is elevated, I don't hesitate to sell. Over the years I've found that many lower-volume ETFs and CEFs, PDI is a good example compared with SPY or QQQ, can decline much more sharply in a short period of time.

I've also noticed that ETFs like HYG and HYD sometimes fall 50% to 70% more during the trading day than comparable mutual funds in the same category. When I see that happen, I sell immediately.

That typically doesn't happen with highly liquid ETFs like SPY and QQQ. Their prices may temporarily deviate during periods of market stress, but usually only for seconds or a few minutes before they normalize.

In the past, I've taken advantage of those panic-driven dislocations for short-term trades. In fact, that's about the only time I'll buy riskier assets.

For example, last year PDI dropped more than 15% in just two days, while SPY and QQQ held up much better. I bought PDI the following day, expecting the discount to narrow.
see What is your best idea for investing today

My post was about intraday illiquidity in traditional mutual funds.

 

[dickoncapecod]

1. Not a tax account, but no on 1. What comes out is what you’re taxed on, not what happens inside the IRA.
2. The ROC reduces your cost basis and therefore may increase your capital gain upon the sale of shares. The ROC itself is not taxed as income since you are just getting your money back.

I failed to read this before creating too much word salad on the issues!
Regards, Dick

 

[dickoncapecod]

Late in the day: the lads beat the 10yr back to 4.58 at auction and have a profit in it. Expect the same tomorrow with the 30 year auction. AMAZING: consumer credit last month FELL 0.2 BIL vs estimates around UP 17 BIL. Slowdown continues...
Regards, Dick
Add: Fed Atlanta Q2 GDP estimate DOWN to 1.3% in line with Fed StLou.

 

[YellowSubmarine]

+ THQ add to my health care CEF...owned it for 15 months and my TR is 7.5% annualized...so-so but good sector potential.

 

[Flyfish1]

+ THQ add to my health care CEF...owned it for 15 months and my TR is 7.5% annualized...so-so but good sector potential.

Yep - I hold THQ and THW. One of my advisory services I subscribe to just dropped THQ and I held.
Take a look at the one month chart and you can see when that sell recommendation came out. I should have bought more but had no spare cash on hand.

 

[Old Dog Seeks New Tricks]

Yep - I hold THQ and THW. One of my advisory services I subscribe to just dropped THQ and I held.
Take a look at the one month chart and you can see when that sell recommendation came out. I should have bought more but had no spare cash on hand.

subscription based advisory services - might you open your kimono, so to speak, and reveal the name(s) of those you have had a good experience with

 

[joejetski]

My preface - I am an unreliable narrator.

I will share the little I know (some of which may be wrong) about CEFs.

CEFs have two prices. The NAV which is supposed to be the value of the actual holdings at the end of each day. The Price which is what you pay to buy the CEF. For funds like the Pimco's which hold thousands of positions many of which are not so liquid the NAV is a best guess. The price of a CEF (what you pay) depends on the psychology of the mostly retail investors and can very wildly above or below the NAV based on fear and greed. Because the price volatility is always much greater than NAV volatility CEFs can be potentially great trading vehicles and gut wrenching buy and hold vehicles.

IMO if you are a buy and hold investor, then individual CEFs may not be for you.

There is one exception, CEFS, which is an activist fund of CEFs. (See undefined). This fund uses the fact that many CEFs are run by greedy incompetent managers who can sometimes be bullied through proxy fights into liquidating or offering redemption at NAV. An investment in CEFS is an investment in Boaz Weinstein, the guy who runs the fund and beats up the PMs of his targets.

IMO this fund is suitable for a buy an hold investor who wants CEF exposure so long as Boaz continues to run it.

I like FOF also, a “fund of funds” CEF with similar yields as CEFS. Both had better TR as of late b/c of their tilt to PMs earlier this year. There are a number of “Fund of Funds” type positions, all are income vehicles, some better than others. I own both CEFS (an ETF) and FOF (a CEF) and are pretty decent B&H vehicles. I add on dips and trim (sell and repurchase) when my position exceeds its target by more than 9 months forward distributions. I then repurchase at a price that is lower than my sale price, but I don’t wait for a fire sale to jump back in.

EDIT: BTW, FOF has the PIMCOS - PDI, PDO, PDX, and GOF in its top 10 positions. So if you own some FOF, you own some PIMCOs.

 

[dickoncapecod]

@Semi-Retyrd
Given your assessment of managers of the CEFs held by Boaz, I'm surprised you favor a CEF that holds assets managed by these miscreants. What Weinstein, Bulldog, etc actually favor doing is forcing FINANCIAL ENGINEERING or DISTRIBUTION FAKERY to raise the market price of their positions in the CEFs. They typically threaten expensive proxy fights or similar attacks to get their way....because fighting them off is viewed as too costly to the target CEF's SHAREHOLDERS.
Currently CEFS owns CEFs managed by this rogues gallery :
Blackrock, Nuveen, Gabelli, PIMCO, Neuberger, Western, BNYMellon, Calamos, INVESCO, Eaton Vance, and others.

Only point, you may have misidentified the scum.
Regards, Dick

 

[joejetski]

A little late to the parade this month. BCX, CLM, DNP, ERH, FOF, GGN, HTD, PTY, ~18% of income portfolio.

 

[dickoncapecod]

Some smart changes to PCE are coming in Sept: a reduction (or elimination) of the idiotic overweight investment management fees and legal expenses. This is before any discussion of integrating trimmed mean computations.
Regards, Dick
PS. Conspiracy theorists note: these changes are not "moving the goalposts" but rather an effort at rationalizing our currently incoherent computation of inflation measures.

 

[Flieger]

Some smart changes to PCE are coming in Sept: a reduction (or elimination) of the idiotic overweight investment management fees and legal expenses. This is before any discussion of integrating trimmed mean computations.
Regards, Dick
PS. Conspiracy theorists note: these changes are not "moving the goalposts" but rather an effort at rationalizing our currently incoherent computation of inflation measures.

Where is this announced?

Flieger