This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Closed-End Funds Still Scary-Cheap

Do you think that tax-loss selling has already begun?

Yes. Our studies show that CEFs most vulnerable to tax-loss selling are those with low discounts or small premiums. Whereas most CEFs have recovered from their mid-August lows, many low-discount funds haven't. Examples abound in the small- and mid-cap sector such as the Royce Value Trust (RVT) and the covered-call writing sector in names like the Nuveen Equity Premium Opportunity Fund (JSN). So that's evidence to us that tax-loss selling has begun.

These CEFs have discounts that are, on average, 7% to 8% wider than their July average, before the general widening happened. They seem to be such bargains that we have positions in many of them, even though we fear that may be "catching a falling knife."

Anything new in trading opportunities?

Most recently, we've taken advantage of increased volatility in certain international equity funds. It's been possible to trade positions with holding periods of less than two weeks and pick up discount differences of 5% or more. Funds we traditionally traded -- and have been very friendly to us the past few weeks -- are Chile Fund (CH) and Emerging Markets Telecommunications Fund (ETF). But we also made good profits in three newcomers to us: Spain Fund (SNF), Aberdeen Australian (IAF) and Indonesia Fund (IF).

Our largest position is in Zweig Fund (ZF), a domestic equity fund. It is recovering nicely from the selling pressure from its rights offering.

You maintain a significant exposure to emerging markets in your portfolios. Does talk of a "China bubble" worry you?

I, personally, believe that Asia ,ex cluding Japan is a great place to be, but we don't have the expertise to comment knowledgably. We have a standard allocation we suggest to clients, but we allow them to decide how much exposure to emerging markets they want. For us, the Asian funds, and the Chinese funds in particular, provide frequent trading opportunities that are too lucrative to ignore. Sometimes China Fund (CHN), sometimes Templeton Dragon Fund (TDF), sometimes JF China Region Fund (JFC) is our Asian largest position.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs