Thu, 15 Aug 2013
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CEF managers' ability to hold onto underpriced illiquid securities in times of market stress represents an advantage over open - end funds that may have to sell to meet unexpected redemptions, says Morningstar's Cara Esser.
With short-term rates remaining low, we don't anticipate an immediate impact on the cost of leverage financing for most CEFs .
As investors ditched certain income-producing assets on worries of rising rates, an abundance of fixed-income CEFs moved into undervalued territory, according to Morningstar's Cara Esser.
The problems at Third Avenue are likely isolated, but both active and passive high - yield investors need to be aware of the risks and opportunities today.
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