David Bookstaber is an experienced financial technology engineer, data scientist, and quantitative analyst based in Berwyn, Pennsylvania. In 2009, he served on the Tredyffrin Township Budget Advisory Working Group, which analyzed and discovered solutions to the municipality's deficit. David Bookstaber is owner of Boniface LLC, a firm that partners with AJ Sterge LP to develop dependable investment strategies for trading closed-end funds.
A closed-end fund is a collection of assets that generates a fixed amount through an initial public offering (IPO) and subsequently issues shares on a stock exchange. It invests any money realized from its IPO in bonds, stocks, securities, and money market tools.
Following are some distinguishing characteristics of closed-end funds:
1. Unlike other funds, such as open mutual funds, a closed-end fund offers only a fixed amount of shares.
2. Market forces (supply and demand) determine closed-end fund shares after the initial public offering. It may be less or more than the net asset value (NAV), which implies the value of a company's total assets minus its liabilities. Traders call close-end shares that sell at a value above the NAV a premium, and refer to those below the NAV a discount.
3. They often generate more returns than open-ended funds because they use borrowing capital to boost earnings.
4. Closed-end funds often distribute income or capital every month or quarter, and do not buy back shares from investors. However, investors can trade shares among themselves.
A closed-end fund is a collection of assets that generates a fixed amount through an initial public offering (IPO) and subsequently issues shares on a stock exchange. It invests any money realized from its IPO in bonds, stocks, securities, and money market tools.
Following are some distinguishing characteristics of closed-end funds:
1. Unlike other funds, such as open mutual funds, a closed-end fund offers only a fixed amount of shares.
2. Market forces (supply and demand) determine closed-end fund shares after the initial public offering. It may be less or more than the net asset value (NAV), which implies the value of a company's total assets minus its liabilities. Traders call close-end shares that sell at a value above the NAV a premium, and refer to those below the NAV a discount.
3. They often generate more returns than open-ended funds because they use borrowing capital to boost earnings.
4. Closed-end funds often distribute income or capital every month or quarter, and do not buy back shares from investors. However, investors can trade shares among themselves.
