Closed End Funds: Is The Door Shut?

With stocks rising to all-time highs and interest rates descending into Death Valley, it's no wonder that both stock and bond closed-end funds are on a tear. Unlike mutual funds, which sell shares directly to the public, closed-enders trade on the exchanges and have been lifted by widespread enthusiasm for growth stocks and hunger for yields. Equity closed-end funds tracked by Morningstar Inc. turned in a 40% total return in '91, while their portfolios matched the 30.4% gain in the Standard & Poor's 500-stock index. Bond-fund shares gained 22.5% as their portfolios rose 18% vs. the 16.1% gain in the Lehman Brothers Govt./Corp. Index.

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