Closed-End Funds Hit Record Lows, Offering Potential Bargains and Risks
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Market turmoil has driven closed-end funds, which are like traded mutual funds, to record-low prices and discounts to net asset value.
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Discounts are widest in tax-free municipal bond funds and some leveraged bond funds, presenting potential bargains.
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Still, closed-end funds can be tricky, with issues like high fees, unreliable dividends, and bad management teams.
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Top funds cited include Nuveen and Western Asset municipal bond funds, AllianceBernstein Global High Income, and Adams Diversified Equity.
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Leveraged funds offer higher risk and reward, with Western Asset Diversified Income, Nuveen Preferred & Income Securities, and First Trust Senior Floating Rate Income noted.