This post was just published on ZYX Global Multi Asset Allocation Alert.
Closed end funds trade on exchanges just like ETFs. The difference is that unlike ETFs, closed end funds have a fixed number of shares. Therefore they either trade at a premium or a discount to net asset value.
The objective is to earn about 20% return in three to four months. Last year’s list returned 51% capital gains plus 12% yield.
It is common at the year-end for discounts on funds in unfavorable sectors to widen considerably. These discounts narrow again in February- March period. The plan is to buy funds if their discounts widen enough before the year-end to put them in the buy zones.
The Arora Report publishes buy zones, % tranche, and estimated % discount to net asset value.
It is important to diversify and scale in small tranches. A practical way to manage is to put in GTC orders.
There is no guarantee that these closed end funds will dip into the buy zones. Therefore, those with an aggressive bent may want to take liberty with the top end of the buy zones based on personal risk preference.
Depending upon personal risk preference, consider limiting total purchase to 3% to 10% of the total portfolio. To understand percentage tranches, please refer to ZYX Trade Management Guidelines.
List Of Stocks
In prior years the list of closed end funds is published by now. Last year we published a list of 13 funds. This year the U. S. market has gone straight up since the election. More trading data is needed for our algorithms to calculate proper buy zones. For this reason the list of funds to buy is not included in this post.
We have the list ready. We are simply waiting for more data to properly calculate buy zones. Please stay tuned.
You are receiving less than 2% of the content from our paid services …TO RECEIVE REMAINING 98%, TAKE A FREE TRIAL TO PAID SERVICES.
Please click here to take advantage of a FREE 30 day trial.
Check out our enviable performance in both bull and bear markets.
