3 Closed-End Fund Bargains for Dad

Forget the golf clubs! We have some great investment ideas Foolishly wrapped up in this special series for Father’s Day.

My father taught me the importance of stretching a buck. With Father's Day just around the corner, I guess I'll return the favor by introducing him to closed-end funds.

I'm not sure why closed-end funds don't get more loving out of investors. The market loves conventional open-ended funds. We even have a newsletter service dedicated to singling out the best ones. Exchange-traded funds -- or ETFs -- are the flavor of the month. So why aren't closed-end funds more popular, especially since they're a way for thrifty investors to buy into a basket of equities for pennies on the dollar?

Closed-end funds are actively managed funds that trade on exchanges. Because market sentiment dictates how the share price fluctuates, you will often find funds that trade for less than net asset value (or the value of all of the fund's assets, divided by the number of shares outstanding).

Another advantage to closed-end funds is that they don't have to print out new shares when investors buy in, nor do they have to sell assets to cover redemptions. Closed-end funds have a fixed number of shares, so they give managers greater peace of mind in their asset allocations.

Where was I? Yes, bargains. Here are a few closed-end funds trading at wide discounts to their NAVs heading into this week.





Adams Express (NYSE: ADX  )




Petroleum & Resources (NYSE: PEO  )




Templeton Emerging Markets (NYSE: EMF  )




Adams Express has stood the test of time. The fund has been around since 1929. Its largest holdings include plenty of blue chips you're familiar with, with General Electric (NYSE: GE  ) making up 4.1% of its assets, and Microsoft (Nasdaq: MSFT  ) and Schlumberger (NYSE: SLB  ) at 2.6% each.

In sum, you can buy a basket of stocks worth $14.57 a share for $12.61 as of the market's close on Friday.

As its name implies, Petroleum & Resources specializes in energy stocks. Most of the holdings center on oil, with ExxonMobil (NYSE: XOM  ) accounting for a thick 11.3% of the fund's portfolio. Petroleum & Resources is the largest holding for Adams Express, at 6.3% of net assets. I guess that makes Adams Express a way to double-dip into the discount, yet investors may still be attracted to a pure sector play in a hot commodity.

My final pick is Templeton Emerging Markets. The Templeton fund family is a pioneer in international investing, and I believe that mutual funds -- especially closed-end funds trading at a discount -- are a great way to get proven managers picking holdings in fast-growing emerging markets.

So there you have the three bargains. Let's hope that will whet your appetite to check out the hundreds of other closed-end funds that currently trade at attractive discounts.

Microsoft is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of stretching dollars. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 24, 2008, at 12:00 PM, davidhu wrote:

    Why bother with Adams Express? A quick historical check shows that since 1985 it has radically underperformed the S&P 500 (almost 3:1 ratio) and it pays a slightly lower dividend rate to boot. Investors are far better served with an index 500 or total stock market index fund.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 664519, ~/Articles/ArticleHandler.aspx, 10/26/2016 5:15:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:02 PM
ADX $12.94 Down -0.03 -0.23%
Adams Express Comp… CAPS Rating: No stars
EMF $12.71 Down -0.11 -0.85%
Templeton Emerging… CAPS Rating: ****
GE $28.87 Up +0.22 +0.77%
General Electric CAPS Rating: ****
MSFT $60.63 Down -0.36 -0.59%
Microsoft CAPS Rating: ****
PEO $19.61 Up +0.01 +0.05%
Petroleum and Reso… CAPS Rating: No stars
SLB $80.02 Down -0.20 -0.25%
Schlumberger CAPS Rating: ****
XOM $87.09 Up +0.37 +0.43%
ExxonMobil CAPS Rating: ****