The NAVigator

Christian Pittard, group head of product opportunities for Aberdeen Asset Management, says that changing structures have made initial-public offerings in closed-end funds more attractive, and were responsible for a big increase in IPO activity in America in 2019 that he expects to continue. Aberdeen continues to expand its presence not only through IPOs but acquisition, and Pittard said he expects the company to keep looking for the chance to bring unique institutional strategies to retail investors. He also noted one fund in the family that he finds particularly interesting that he believes investors may be overlooking.

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the founder and executive chairman of the Active Investment Company Alliance, revisits data used by his father George Cole Scott in writing "Investing in Closed-End Funds: Finding Value and Building Wealth," the seminal book on closed-end fund investing that was written 30 years ago. He examines changes in the industry -- moves away from single-country funds, dramatic growth amongst new funds and more -- and gives his take on what will be important for closed-end fund investors in the coming decade.

John Cole Scott, chief investment officer at Closed-End Fund Advisors and the founder and executive chairman at the Active Investment Company Alliance, looks at the year that was in closed-end funds for 2019, starting from the Christmas holiday a year ago when the business had been decimated by a market downturn to turn things around in the course of one of the industry's best years ever. Scott also turns his attention to what lies ahead for closed-end funds in 2020.

Russell Robinson of Capital Institutional Services -- a brokerage platform that supplies liquidity for closed-end funds -- describes how some issues are thinly traded and require an intermediary like his firm to step in and maintain an orderly market. He explains the importance of having that liquidity and the lengths his firm sometimes must go to make it work when institutional investors want to make big moves in funds that don't trade much.

This week on The NAVigator, Jeremy Goff, managing director at Tortoise Advisors, discusses how investors can use interval funds -- which have less liquidity than the standard closed-end fund -- to add structure and diversification to a portfolio. Goff compares traditional closed-end funds, as well as hedge funds, to interval offerings, noting that the reduced liquidity of an interval fund often pays off by allowing managers to pursue higher-risk strategies without any danger of investor flight

Axel Merk, president and chief investment officer at the Merk Funds, recently took over the ASA Gold and Precious Metals closed-end fund, and he talks about what convinced him to mak the move, the differences between traditional funds and closed-end funds for investors seeking precious-metals exposure, and how the closed-end space -- which traditionally has not been filled with lots of options for investors -- is changing in its coverage of precious metals now.

Jerry Raio, president and chief executive officer at Arbor Lane Advisors in New York -- a firm that helps money-management companies develop new investment products -- says that changes making closed-end fund initial public offerings more attractive have combined with favorable market conditions leading 2019 to be the most prolific time for IPOs that the industry has seen in years. Raio says the trend looks likely continue into the new year with a wide range of new, different and unique new types of offerings helping to fuel growth.

Nicholas Marshi, editor of BDC Reporter, said that business-development companies held strong on their dividends in the third-quarter despite LIBOR dropping and eroding investment income during the period. Marshi said BDC's made up for the income shortfall caused by LIBOR by adding assets or selling equity stakes in companies to keep earnings steady to slightly up from a year ago. Marshi noted that BDC's are mostly immune to headlines and politics, so he expects stable dividends to continue through the next year regardless of market events and news.

John Cole Scott, executive chairman of the Active Investment Company Alliance returns to The NAVigator to answer audience questions about some of the nuts and bolts of closed-end fund investing, covering tax-loss selling and where to expect good opportunities this year, cash-flow generation and how to build a portfolio of closed-end funds that produces an income stream, and the documents an investor should review with closed-end funds as compared to what they might examine with a traditional mutual fund.

Phillip Goldstein, co-founder of the Bulldog Investors hedge fund and a legendary activist investor in the closed-end fund space said at the Active Investment Company Alliance Boot Camp and Conference in New York City that he fears for the future of shareholder activism in closed-end funds because firms have been putting up barriers that regulators have allowed, making it increasingly difficult for outsiders to gain a foothold that will help them make a difference.