Updated: March 19, 2018
One of the greatest things about closed-end funds (CEFs) is that they often cost less than they’re really worth.
And no, I’m not basing that on some obscure metric—I’m literally talking about the difference between the market price of the assets the fund owns and the market price of the fund itself.
It works like this: a CEF can trade for, say, $9.90, even though all the assets the fund holds (known as the net asset value, or NAV) are worth $10. Believe it or not, this happens a lot—it’s exactly how billionaire investors make big money in CEFs.
Take, for instance, Boaz Weinstein of Saba Capital Management.…