Closed-end funds fluctuate in value, trading sometimes at a premium to the value of the fund's holdings (net asset value, or NAV) and sometimes at a discount. Periodically during market upheavals, discounts to NAV can expand to extreme levels. Investors who buy at big discounts benefit as the fund moves back to a price that is closer to the value of its underlying holdings.
The following 12 income funds are all selling at discounts to NAV that are substantially greater to the average discount over the past 12 months--making them good candidates for making money if those discounts narrow back to the averages.
Madison Strategic Sector Premium Fund (nyse: MSP)
Yield: 11.55%
Discount: 11.12%
Average Discount: 7.60%
Nuveen Tax-Advantaged Dividend Growth Fund (nyse: JTD)
Yield: 9.98%
Discount: 11.74%
Average Discount: 8.66%
Madison/Claymore Covered Call & Equity Strategy Fund (nyse: MCN)
Yield: 11.81%
Discount: 10.06%
Average Discount: 7.22%
S&P 500 GEARED Fund (nyse: GRE)
Yield: 2.6%
Discount: 6.25%
Average Discount: 3.46%
Nuveen Equity Premium Advantage Fund (nyse: JLA)
Yield: 10.41%
Discount: 10.13%
Average Discount: 7.46%
BlackRock Enhanced Equity Yield & Premium Fund (nyse: ECV)
Yield: 12.58%
Discount: 4.73%
Average Discount: 2.31%
Eaton Vance Tax-Managed BuyWrite Income Fund (nyse: ETB)
Yield: 10.50%
Discount: 8.44%
Average Discount: 6.02%
Nuveen Equity Premium Income Fund (nyse: JPZ)
Yield: 9.93%
Discount: 10.84%
Average Discount: 8.61%
First Trust Enhanced Equity Income Fund (nyse: FFA)
Yield: 10.38%
Discount: 11.33%
Average Discount: 9.41%
Nuveen Equity Premium and Growth Fund (nyse: JPG)
Yield: 9.67%
Discount: 11.36%
Average Discount: 9.56%
Nuveen Equity Premium Opportunity Fund (nyse: JSN)
Yield: 10.08%
Discount: 10.04%
Average Discount: 8.34%
Enhanced S&P 500 Covered Call Fund (nyse: BEO)
Yield: 12.46%
Discount: 1.18%
Average Discount: 0.47%