Security - Check Permissions

MFDF - Mutual Fund Directors Forum - Commentary: Alternative Strategy Closed-End Funds

Member Login

Request an account

Sample Banner 1

Commentary: Alternative Strategy Closed-End Funds

A Morningstar closed-end fund analyst recently commented on the wide array of investment strategies employed by closed-end funds, including alternative and hedge-fund-like strategies.  The commentary describes the types of alternative strategies used and compares their performance to similarly managed ETFs.  The following types of funds were analyzed by the author:

  1. Nontraditional Asset Class.  This category includes closed-end funds that invest in currency and commodities, specifically gold and silver.
  2. Nontraditional Strategies.  This category includes long/short funds (funds that hold both long and short positions) and covered call funds (funds that hold equities and write call options on individual holdings or indexes).
  3. Illiquid Investments.  This category includes funds that are able to gain access to illiquid investments that are typically unavailable to traditional mutual funds.