Investor Education
Why ETF’s?
ETF’s (Exchange-traded funds) have seen increasing popularity among advisors & investors.
Why we have chosen an ETF to deliver our Strategy:
Targeted Exposure
Lower Costs
Tax Efficiency through in kind transfers
Portfolio Transparency
Liquidity & Trading Flexibility
Diversification & Improved Risk Management
ETF vs. Mutual Funds - Inflow/Outflow
CEF’s - Overview
A CEF (Closed-End Fund) is an investment company whose shares are traded on the open market after an IPO.
CEFs are diversified via a broader investable universe. CEFs can invest in nearly every equity and fixed income asset class, as well as less liquid & less accessible markets or securities and alternative assets.
CEF’s represent a niche (but sizable) segment of the market with unique characteristics and opportunities.
Why We Choose CEF’s as Our Core Holding
CEFs are designed to potentially provide consistent and steady income. This permits our portfolio management team to look at all aspects of the CEFS including its holdings, leverage, discount/premium & distributions.
We believe academics & market professionals struggle to explain CEF discount/ premium movement… but our experience shows they display powerful reversion properties.
CEFs don’t need to manage daily inflows and outflows from investors buying and selling shares, like open-end MFs or ETFs. This means the funds can remain fully invested in their strategy, rather than needing to hold cash aside. It also provides us the freedom to take a longer- term view.
CEFs are historically owned by retail investors, and there is minimal analyst coverage. We believe institutional investors tend to overlook them, which could present an opportunity to take advantage of the inefficiencies in the CEF market.
