One of the great ironies of investing is that Wall Street can spend enormous amounts of time trying to discover hidden value while simultaneously ignoring value sitting right in front of everyone.
Nowhere is this more evident than in the closed-end fund market.
Unlike traditional mutual funds or exchange-traded funds, closed-end funds have a fixed number of shares that trade on an exchange. Investors buy and sell those shares from one another rather than directly from the fund sponsor.
That simple structural difference creates one of the most persistent anomalies in finance.
A fund can own a dollar’s worth of assets and yet trade for 85 or 90 cents.
