A New Fund at the Right Time
Although the fund contains only 30 holdings, no single CEF will have more than a 4.25% in the fund subject to rebalancing. That will protect YYY holders against any sort of extreme outlying event that might occur in one fund.
Yield information isn't available yet from the company website, but it is common for CEFs to yield 6-8%. For comparison, the PowerShares CEF Income Composite Portfolio (PCEF) has a trailing yield of 7.9%.
The total expense ratio of YYY is 1.65%, but as with any fund of funds, the expense ratio has two components. The expenses for the underlying CEFs, known as acquired fund fees, are 1.15%, and the management fee to Magoon Capital is 0.50%.
Every investment product has risks, and understanding those risks are crucial to investment success. Potential volatility in YYY isn't a reason not to have exposure, but is an argument for moderate exposure.Follow@randomroger This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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