Does anyone trade closed end funds? I've noticed that the discounts to NAV seem to grow toward the end of the year and then recover into the new year. I think it has to do with tax loss selling and the fact that they are not very liquid so when brokers start moving clients out of an issue and into another one (for an end of year commission bump) it tends to make the discounts larger. Anyone with any experience on this?
You might want to ask the question in this forum http://www.elitetrader.com/vb/showthread.php?s=&threadid=58688&highlight=closed+end+funds
There are usually a few good end of year CEF plays to be had. You may want to start now,or be a purist and wait until the last few days of december once the funds have gone ex-div. Last year,the preferreds/convertibles and floating rate bank loan funds did well from this perspective. This year, I'm looking at muni bond cef's (many of which started their discount narrowing in Aug-Sept) and the energy/nat resource area for starters. Go to cefa.com and search by discount & correlate that with the price activity to get started. Avoid the perrenial losers (hunt around a little to find out - like eqqus fund) and make your best play. I think the Herzfeld newsletter gives reccomendations but don't know for sure. There was a good site last year that popped up - closed end mutual fund orphans - that was useful. Don't know if it will be updated...
check out http://www.etfconnect.com/select/FindAFund.aspx You can sort by a number of different variables, such as discount to NAV.