The shareholders of the $540 million ( FVD ) First Trust Value Line Dividend have come up with an unusual solution to the closed-end fund's persistent tendency to trade at a discount to its net asset value: It's being reorganized into an exchange-traded fund.Value Line Dividend ceased trading on the American Stock Exchange on Friday. The fund's assets will be transferred to, and its liabilities assigned to, the newly created First Trust Exchange Traded Fund, which starts trading Monday under the same ticker symbol as its predecessor. Shares of the ETF, which will track an index designed with a similar focus on dividends and capital appreciation, are being distributed to the closed-end fund's shareholders on a tax-free basis. It's not unusual for closed-end funds to trade at a discount to the value of their holdings. That's because, unlike open-end funds, which issue and redeem shares upon request at net asset value, closed-end funds issue a fixed number of shares that can only be traded on an exchange. So the price of a closed-end fund with a net asset value of $100 per share can fall to $90 a share, or a 10% discount to its NAV, if there isn't a lot of demand for the product. This was basically the case with Value Line Dividend. Between Jan. 1 and May 31, its discount to NAV averaged more than 12%. However, the discount has since been more or less eliminated, perhaps because investors bid up the stock price in anticipation of the reorganization. The discount shrank to 9% in June and was only about 1.3% at the end of November, according to ETFConnect.