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Hi, Burt S. We use Templeton's closed-end fund GIM Global bond. No load on this thing and a low minimum, but it's selling at a premium right now. Pays about 5.15%. I plan to add some more on a pullback. FWIW, hawk
I am in GIM as well. Managed very similarly to the mutual fund, but it is at a premium that seems getting steeper with each day. I was able to add to my position recently by placing a limit order and was pleasantly surprized that it was hit. I am with Accipiter that this is a "Fund Discussion" and not at all OT.
I have 2 questions about GIM and other closed end funds. 1.Why worry about the premium if you can continue to hold it and some day sell at least the same premium? 2. What is a good site to evaluate the premiums of closed end funds. Also a site to compare one Closed end to another. With open end funds it is not difficult.
1) - no different than buy low and sell high. If the discount goes to -5% and stays there forever and you bought at 6%, you deduct 11% right off the bat (from your gains and losses. On the other hand if the premium is 6% and you sell when the premium is 12% - you gained an extra 6%. You just got to see where the premium averages and see what you want to do.
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look at the variation in price and nav on this chart since inception - quite a bit of difference in premium and discount over the period since inception.
Both Investor and Accipiter posted solid replies. I only suggest that you use the recent 52 week average premium/ discount and also look at a long term history. GIM goes back many years and it is all available on cefconnect.com (nuveen website) or cefa.org. Even M* has recently developed a CEF section. When premium is above historical average, there are bound to be wild swings in the price which have nothing to do with NAV. People who bought at a discount are booking their profits for example... So i do suggest sticking to the average or below average pricing.
Additionally, when you research a closed end fund, check out leverage and a distribution source. For GIM, there is no leverage, and the 5% distribution has been historically paid purely out of income, complemented by cap gains - no destructive return of capital.
Comments
fgbrx
http://www.franklintempleton.com/retail/app/product/views/fund_page.jsf?fundNumber=816
tgbax
http://www.franklintempleton.com/retail/app/product/views/fund_page.jsf?fundNumber=616
We use Templeton's closed-end fund GIM Global bond. No load on this thing and a low minimum, but it's selling at a premium right now. Pays about 5.15%.
I plan to add some more on a pullback.
FWIW, hawk
1.Why worry about the premium if you can continue to hold it and some day sell at least the same premium?
2. What is a good site to evaluate the premiums of closed end funds. Also a site to compare one Closed end to another. With open end funds it is not difficult.
Burt S.
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look at the variation in price and nav on this chart since inception - quite a bit of difference in premium and discount over the period since inception.
take a look at the pricing history tab.
http://www.cefconnect.com/Details/Summary.aspx?ticker=GIM
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comparison enter GIM TEGBX and whatever you want.
http://research.tdameritrade.com/public/etfs/compare/compareResults.asp?
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http://www.morningstar.com/Cover/CEF-Closed-End-Funds.aspx
http://customer.wcta.net/roberty/ETF.HTM
http://www.etfguide.com/etftickerguide.php
http://www.closed-endfunds.com/
http://guides.wsj.com/personal-finance/investing/how-to-invest-in-a-closed-end-fund/
http://research.tdameritrade.com/public/etfs/compare/compare.asp
Additionally, when you research a closed end fund, check out leverage and a distribution source. For GIM, there is no leverage, and the 5% distribution has been historically paid purely out of income, complemented by cap gains - no destructive return of capital.
thank you all for the education. This new site Mutual Fund observer is turning out to be a very educational experience. More than i hoped for.
Burt S.
Burt S.