The NAV is purely hypothetical. Unless the fund manager decides to sell all assets and return money to investors it's meaningless.
Ultimately, the biggest force on share price for closed funds is investor demand.
At the current time, investor demand for closed funds is at an all time low. Accordingly, most closed funds are suffering from ridiculous discounts. Why? Because there are no buyers in the market, so if you want to sell you have to take the best price available.
If you are confused by the discount problems constantly facing closed funds, don't be ashamed. There will always be an abundance of people trying to take your attention away from this fact.
Fund managers love closed funds, because its a permanent source of capital and therefore fees. You can't just put in your redemption notice and leave a dud fund. It's the reason for the last 7 years every fund manager who had a run of good luck, quickly opened a closed fund.
There will always be fans of closed funds - you will hear them regurgitate what is told to them by fund managers - "if there is a market downturn the fund doesn't have to sell at the worst time to meet redemptions"... "steady source of income"...
What they won't tell you is the demand side has been going downhill for years. This isn't just symptomatic of closed funds, but also active investment strategies.
When you combine both a closed fund, and active management, you have the ultimate ugly duckling. This may or may not change.
One thing is for sure... if anyone ever tries to convince you to buy at the float for any closed fund they have zero interest in your financial well-being.
MFG Price at posting:
$60.45 Sentiment: None Disclosure: Held
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