Mutual Fund Performance Vs. Closed-End Funds
A closed-end fund is a hybrid investment with the advantages of stocks and mutual funds. They tend to beat mutual fund performance because a closed-end fund can invest 100% of your money (and sometimes more because closed-end funds can borrow money), whereas mutual funds must keep some money in unproductive cash to pay people wanting to cash in their shares.
Lack of worry about redemptions also means that closed-end fund managers can buy assets that have potential for greater gains than regular stocks. In addition, many closed-end funds trade at a discount to net-asset value, but investors should not be suckered into buying the fund with the biggest discount. A good time to buy these funds is after some bad news has spooked investors. You can look at particular funds that specialize in sectors or countries that have been affected by a specific event for greater than normal discounts.