Strategies · Core
Closed-End Fund Discount
Buy closed-end funds at a wide discount to NAV and fade rich premiums — a stubborn retail-structure anomaly.
Definition
Long wide-discount CEFs, short tight-discount or premium funds, optionally hedge the underlying. The discount can persist; catalysts are tenders, activism, or a sentiment turn. Liquidity is poor.
Why it matters
It is a textbook limits-to-arbitrage case. The discount is not a clock.
Case
A muni CEF at 12% discount that stays 12% for three years while you pay the fee. Mean reversion was a hope.
How to read it
Why the discount exists (illiquid holdings, fee, leverage). A 12% discount on stale NAV is not 12% of value.
No query has been run yet. Which is tragically normal for most knowledge systems, but we are trying to evolve past decorative databases.