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Are closed-end funds a good investment?

The best closed-end funds will significantly boost your portfolio income and allow you to buy their underlying stocks and bonds at a discount. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works .

Should you invest in a preferred stock ETF?

However, the strategy typically results in one of the biggest yields among preferred-stock ETFs, and its lower-than-average 0.41% expense means you get to keep more of the fund's returns. Let’s turn to another group of funds that offer diversified preferred stock exposure: closed-end funds, or CEFs.

Do preferred stock CEFS reduce risk?

That sounds dangerous, but preferred-stock CEFs cut risk by limiting these borrowings to 35% of their portfolios or less, on average. Leverage risk is also mitigated by the fact that these funds have hundreds of holdings, and preferred stocks are less volatile than regular stocks.

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