With so many different investments to choose from, it can be hard to know all of them. But with some little-known investments like closed-end funds, the opportunity comes from most people's complete unfamiliarity with them.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at how closed-end funds work. Dan notes that unlike regular mutual funds, closed-end funds have mixed numbers of shares, allowing them to trade at discounts to the value of their underlying assets from time to time. Dan explains how well-known managers Franklin Templeton (NYSE:BEN), Eaton Vance (NYSE:EV), and AllianceBernstein (NYSE:AB), as well as PIMCO and Nuveen, use closed-end funds to ensure a solid base of assets under management without worrying about redemptions. Dan recommends looking at liquidity and fees in order to separate out the best closed-end funds from the rest.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.