Miscellaneous: Closed End Funds

Easy extra money through dividend stock investing, P2P lending, real estate income, and alternative online money making ideas

In looking for ways to increase my easy passive income beyond dividend stocks, I’ve recently come across the world of closed-end funds (CEF’s). CEFs are part mutual fund and part ETF but for passive income dividend seekers like myself, they offer an interesting alternative to add to your portfolio.

I recently purchased some shares in the PowerShares CEF Income Composite Portfolio (PCEF) fund which currently yields 6.25%. PCEF is interesting because it is a fund of funds (made up of other income focused CEFs). For people like me dipping a toe into the CEF world, I think it’s a good choice. Note that since the dividends are taxed as ordinary income, I purchased the shares in my tax advantage IRA account.

Are you invested in CEF’s? Please let me know in the comments below!

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One Response to Miscellaneous: Closed End Funds

  1. Mr. ATM says:

    Hi,

    I have invested in CEF when I first started dividend investing, mainly for its high yield. But I ended up selling it as I didn’t quite understand how CEFs worked and dividend seemed too risky as the management kept talking about reducing it.

    In any case, I got out of it with a small loss and decided not to invest again in such CEFs as I don’t understand them. Probably an ETF approach is a better way to invest in CEFs.

    Mr. ATM

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