CEF Connect Provides Closed End Funds Information
While closed-end funds (CEF) have garnered a lot interest from stock market participants in recent years, it is still a foreign concept to many. Those of you wondering what closed-end funds really are, and how they work will be happy to know that the Nuveen Investment Group has a website just for you. To understand the dynamics of closed-end funds visit the resourceful CEF Connect.
In minutes you can start learning about closed-end funds basics, types, strategies and more. Unlike Nuveen’s own website, which offers a small section on CEF, CEF Connect is completely dedicated to the closed-end funds universe.
Because of how difficult it can be to understand CEF at first glance, Nuveen created this in-depth web portal to educate the general investing public. With the help of CEF Connect, you can use this collection of priceless information to not only learn the basics, but also advanced strategies that can all be found in CEF Connect’s Education Center.
What Is A Closed-End Fund?
So, while you continue reading I will give you a brief overview of the type of information you can easily find on CEF Connect. Initially, you need to know what closed-end fund really means.
For those of you readers that are income-conscious looking to accomplish a wide range of goals, you should definitely learn about closed-end funds. It’s especially attractive to those looking to accomplish long term total returns, higher income portfolio diversification, and even meet obligations with a quarterly or monthly cash flow.
How a Closed-End Fund Works
A CEF is a publicly traded investment group that trades in a variety of sectors including stocks and bonds. From there capital is raised through an initial public offering (IPO). Investing according to the objectives, the CEF shares and proceeds are dispersed.
They were labeled as “closed” because once they reach the capital goal, there are usually no shares available from the sponsor and issuance of new shares is closed to investors. Following the IPO, all of the closed-end funds are listed on a national exchange like the New York Stock Exchange (NYSE).
Its shares are then bought and sold in transactions with other investors, rather than with the sponsor company itself. Ultimately, the net asset value is not what determines the price, the market’s demand and supply do.
Possible CEF Benefits
I say possible because you know as well as I do, nothing is ever a “sure-thing” in stocks and investing. While CEF Connect lists out almost ten advantages, I’ll share five advantages that appealed to me the most.
I was especially intrigued by the fact that there is a regular prescribed schedule for cash flow and distributions. Even though you still have to pay a brokerage commission, closed-end funds tend to have lower operating costs. Following low operating costs and brokerage fees, there are no annual 12b-1 trading fees.
I also found it interesting that once the IPO phase has concluded there are no minimums. If someone wanted to just buy one share, there is nothing stopping them from doing so. Lastly, and most likely the most important benefit comes to your portfolio. Without the pressure of constantly investing or trading securities, you are able to take advantage of longer term and less liquid securities or markets.
Closed-End Fund Basic Concepts
The last sneak peek I will give you to CEF Connect’s site are their key concepts. One of the first basic concepts you need to understand in order to start investing with closed-end funds is the net asset value. CEF Connect does a great job visualizing this, giving you a formula to easily understand.
Basically, you can determine the NAV by subtracting fund liabilities from fund assets and dividing the difference by outstanding shares. Discounts also play a role in closed-end fund jargon, referring to the percentage between the sale price and net asset value.
From there, dividends, distributions, and performance complete the picture, by giving you a few options to receive your earnings. CEF connect also lets you know you what to expect in regards to taxes while also covering the percentage increase between share price and your total return on share price including distributions. Just by briefly explaining these points I feel dizzy, I definitely see why they made a resource site!
What Else CEF Connect Offers
Besides their amazing education center that explains CEF from start to finish, CEF Connect also has a Glossary and Frequently Asked Questions (FAQs) page that further explain Closed End Funds.
The CEF Connect website offers useful features for investors seeking to make investments in Closed End Funds. It also provides fund pricing data and information about the structure of Closed End Funds for investors that are interested in learning more about specific Closed End Funds.
The CEF Connect Fund Screener provides investors the opportunity to find Closed End Funds that suit their investment needs. Using the CEF Connect Fund Screener, a potential investor can sort by the major Closed End Fund Categories, including: Tax-Free Income, Taxable Income, United States Equity, and Non-United States/Other.
The CEF Connect Fund Screener search can be further refined to search by fund sponsors and funds that either do or do not participate in leveraged investing.
The CEF Connect Fund Sorter allows users to sort Closed End Funds by: Ticker, Fund Name, Strategy, Discount (to Net Asset Value). The CEF Connect Fund Sorter is a useful tool to find Closed End Funds that fit into a desired investing strategy and to understand the current discount to Net Asset Value for Closed End Funds.
The CEF Connect Closed End Funds Internet portal is a powerful tool that is available to investors considering investing in Closed End Funds and investors invested in Closed End Funds. Additional enhanced features are available to registered users of CEF Connect.