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Cuba's longstanding dictator Fidel Castro barely got one foot in the grave and already investors are getting excited.
The Herzfeld Caribbean Basin Fund (CUBA) , a closed-end fund known as the "Cuba Fund" because of its ticker, surged as much as 17% intraday on Monday following the Cuban dictator's death on Friday. More than 1.8 million shares of the fund had changed hands by Monday afternoon compared with normal daily volume of about 22,000.
The Cuba Fund holds stocks poised to benefit from a normalization of U.S. relations with the island nation. Castro's death is fueling speculation that relations between the United States and former Soviet ally Cuba might continue to thaw under his brother, Raul Castro, who has led the Caribbean country in recent years. President Barack Obama announced plans in December 2014 to chart a new course of policy toward Cuba, and he visited Havana in March of this year. The country has suffered for decades under one-party socialist rule and a brutal U.S. economic embargo.
"Fidel's death is of great consequence and could lead to new era in relations between U.S. and Cuba," said Thomas Herzfeld, who manages the Cuba Fund as chairman of Thomas J. Herzfeld Advisors, based in Miami Beach, Fla. Herzfeld is also one of the fund's biggest individual stockholders, with about 5.2% of the shares outstanding, according to FactSet. He declined to comment on the price move.