Discounts Beckon in Closed-End Funds
In the New York Times, August 31, 2008, Benjamin Tobias was quoted in the article Discounts Beckon in Closed-End Funds by Conrad De Aenlle. Closed-end funds often trade at a premium or discount due to the fact that there are a fixed amount of shares on the market. Some advisors are attracted by this but Ben is unenthusiastic. “Managers of closed-end funds are receiving their fees day in and day out, regardless of the value of the funds,” he said. “If an open-end fund does poorly, you can sell it and the assets fall. If a closed-end fund does poorly, it still has all of those assets; all you can do is sell to somebody else. I want to align compensation with performance.”