Between December 2003 and December 2005, assets of closed-end funds increased 29%.

Most of this growth was in the creation of new equity funds.

For a number of years, most closed-end funds were focused on the bond market.

In 2003, assets of equity funds made up only 24% of the assets of closed-end funds. This increased to 32% in 2004 and 38% in 2005.

The larger market for equity closed-end funds represented, on the one hand, greater interest in specialized portfolios such as foreign equities, real estate investment trusts, or less liquid stocks, and on the other, a general improvement in the equity market as the nation recovered from the recession of 2001.

Nuveen Investments, a leading specialist in tax exempt municipal bond funds, publishes a special website (ETFConnect) that presents well-organized information on closed-end and exchange-traded funds, without charge.

For many funds in this category, the site provides fundamental data, Standard & Poor’s Stock Reports, SEC Filings, Industry Diversification, Country Diversification, Investment Quality, Credit Quality, Annualized Total Returns, Investment Objective, and Dividend History.

The Federal Reserve Flow of Funds Data on Closed-End and Exchange-Traded Funds are shown in Table F123 on this site.

Although no investment vehicle is perfect, I find much to like in closed-end funds.

Federal Reserve Flow of Funds Table F.123 shows the big picture for this category of investment. Depending upon the market, new issues of closed-end funds focus on bonds or equities. However, unlike open-end funds, closed-end funds tend to persist after market fads pass and a wide variety of closed-end funds are traded on the exchanges, suitable for almost any asset-allocation need.

	CEF Website

The Closed-End Fund Association maintains a website that offers a wealth of free information about this type of investment. Here you find educational resources, plus up-to-date statistics from Thomson Financial.

More »