Closed-end funds: powerful portfolio solutions

 

Look beyond traditional 

For those investors whose primary goal is income generation, today’s low-yielding environment makes that goal challenging. Legg Mason’s closed-end funds (CEFs) offer a strong alternative to traditional investments, providing access to specialized expertise, helping investors looking to build income and improve financial outcomes.

Legg Mason is among the top 10 largest closed-end fund managers in the U.S., offering over 25 CEFs, with over $10 billion in assets under management1. With a legacy reaching back to 1929, we offer breadth and depth of investment strategies to help meet the needs of our individual and institutional clients. We offer a comprehensive lineup of closed-end funds targeting compelling investment opportunities across fixed income, equity and specialty sectors. Our funds offer investors the potential for attractive dividends and active professional management with the convenience of an exchange-traded security.

1 Source: Lipper, as of December 31, 2016. 

 

Income and Distribution Potential

Income and Distribution Potential 

A long-term value-oriented approach to building income and capital appreciation.

Portfolio Solutions

Access to Specialized Asset Classes

Ability to invest in niche and less liquid asset classes 

Active Management

Active and Efficient Management

Structure enables managers to remain fully invested and not to be pressured by fund flows and market volatility 

 

The benefits of choice and flexibility

While often designed specifically for income, CEFs invest in a variety of asset classes, styles and sectors to accommodate a broad range of investor objectives. The potential benefits of closed-end funds go beyond professional management. Their distinct features mean they can play a critical part in many investment strategies. 

  • Exchange traded throughout the day, with a price per share determined by the market, CEFs can trade at a premium or discount to the NAV (net asset value)
  • Defined asset pool allows managers to remain fully invested at all times without worrying about having enough cash on hand to meet redemptions from investors who suddenly sell — especially in a down market
  • CEFs do not have minimum investment requirements if purchased on the secondary market

 

Are Closed-End Funds and Open-End Funds the same?

Closed-end funds look like open-end funds , but typically trade like stocks. Both are professionally managed investment companies that pools investors’ capital and invests in stocks, bonds or other securities according to an overriding investment objective. CEFs differ from open-end funds when it comes to some fund management aspects, buying and selling shares, trade execution, use of leverage, fees and investment minimums. It is important to fully understand the differences before investing. For more detailed information please review Understanding Closed-End Funds.
 

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IMPORTANT INFORMATION: All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Please see each product’s web page for specific details regarding investment objective, risks associated with hedge funds, alternative investments and other risks, performance and other important information. Review this information carefully before you make any investment decision.

The Closed-End Funds are not sold or distributed by Legg Mason Investor Services, LLC ("LMIS") or any affiliate of Legg Mason, Inc. Unlike open-end funds, shares are not continually offered. Like other public companies, closed-end funds have a one-time initial public offering, and once their shares are first issued, are generally bought and sold through non-affiliated broker/dealers and trade on nationally recognized stock exchanges. Share prices will fluctuate with market conditions and, at the time of sale, may be worth more or less than your original investment. Shares of exchange-traded closed-end funds may trade at a discount or premium to their original offering price, and often trade at a discount to their net asset value. Net Asset Value (NAV) is total assets less total liabilities divided by the number of shares outstanding. Market Price, determined by supply and demand, is the price an investor purchases or sells the fund. Investment return, market price and net asset value will fluctuate with changes in market conditions. The Funds are subject to investment risks, including the possible loss of principal invested.