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Morningstar, Inc. Commentaries

Alternatives Strategies in a CEF Wrapper

Dec 10, 2013
Click here to access Alternatives Strategies in a CEF Wrapper

Closed-end funds are commonly--and incorrectly--perceived as old, stodgy investment vehicles that primarily buy and hold municipal bonds. Yes, CEFs are old (the first was launched in the United Kingdom in the late 1800s), and yes, almost half of the CEFs in existence invest in municipal bonds. But investors in the know realize that CEFs are far from boring; many employ a wide array of investment tactics, even alternative and hedge fund-like strategies. While the definition of what is "alternative" is open to interpretation, Morningstar defines alternatives using three buckets:

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Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individuals, financial advisors, and institutions.

Morningstar provides data on more than 385,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 8 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services and has approximately $195 billion in assets under advisement or management as of Sept. 30, 2012. We have operations in 27 countries.