This Understated BlackRock Move Drove a Fast 12% Gain (More on the Way)

One often-overlooked way for closed-end funds (CEFs) to give us a profit boost is for management to buy back a fund’s shares. By now, buybacks are probably familiar to most investors: With “regular” stocks, buybacks reduce a company’s share count, which boosts earnings per share and other per-share metrics, indirectly boosting share prices. With CEFs, buybacks have a bit of a different effect. With these high-yielding funds, we want to focus instead on how buybacks affect the discount to net asset value (NAV, or the value of a CEF’s underlying portfolio). Buybacks, Fixed Share Counts Help Management “Control” CEF Discounts Members of my CEF Insider service know that we love discounts to NAV because they’re the primary indicator of CEF value.… Read more