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Robert Powell:

So when I think about is this a good investment for you, there I guess people they care about retirees who are seeking income, but also younger investors, millennials and Gen Z's, and the degree to which closed-end might be appropriate for those both ends of the spectrum. Good for both retirees and millennials depending on?

Daniel Wolfe: Absolutely.

John Cole Scott: Definitely. I think there's a future for the closed-end fund wrapper in the US to maybe mirror some of the progress and the way it looks in London where it's more institutionally held not as an income focus where you focus on a good active manager and the permanent structure of the fund to bring ideas to market that aren't just about a retirement's yield. I know there are sectors you can play in the closed-end fund space that are probably more millennial focused. Could be some of the BDCs which are closed-end fund like, could be some of the country funds, if you find a deep discount in a country you're optimistic on, I think Bill Gates's recently bought one of the China focused funds with his foundation and that's very hopefully optimistic for that fund's outcome.

Millennials generally don't need tax free income or tax thoughtful income. And so, I think the sponsors can work with the regulators to help build products that maybe address good active management with public liquidity.

Bill Meyers: If I could take a swing at that also. With respect to investor classes, whether they be retirees or millennials, I mentioned earlier, the closed-end fund market, of the 300 billion or so it's skewed probably about 60% toward fixed income. But, across that $300 billion or so, if you name an asset class, there's a closed-end fund that has it in there. When people think of income, it might be primarily bonds, whether it's Munis or corporate bonds. But there's a whole host of other asset classes that are embraced by closed-end funds that generate strong levels in cash flows. So preferred securities, there's a lot of preferred securities closed-end funds. MLPs that John mentioned earlier. You have REIT base closed-end fund.

So these other asset classes that have some potential for growth as well like REITS, that's in a closed-end fund. And again, if you think about $300 billion in closed-end funds, 40% that is outside of the traditional bond market. So there's a lot of opportunities for retirees to get strong levels of income through closed-end funds and the benefits of the closed-end fund structure. But for the millennials, I think there's also funds for them that provide the same benefits of having a permanent capital vehicle, the ability to opportunistically take advantage of markets that might not be in favor and management that can be there to take advantage of.

Closed-end funds are tied to a host of different asset classes.

That's the assessment from Bill Meyers, senior managing director at Nuveen.

"If you name an asset class, there's a closed-end fund that has it in there," he said. "When people think of income - it might be primarily bonds -- but there's a whole host of other asset classes that are embraced by closed-end funds that generate strong levels in cash flows."

Some of those other asset classes, according to Meyers, include: Master Limited Partnerships and Real Estate Investment Trusts.

Want to Buy $1 Worth of Stock for 90 Cents or Less? You can with certain so-called "closed-end" mutual funds - an often overlooked investment class. Click here to register for a free online video in which TheStreet's retirement expert Robert Powell and an all-star panel tell you all you need to know. The webinar is sponsored by Nuveen.

 

 

 

 

 

This article was written by a staff member of TheStreet.