Affluent Gravitate to Closed-End Funds

Affluent investors are increasingly turning to closed-end funds as diversification tools, Dow Jones reports. Because they close to new investments after an initial public offering, they place a greater amount of their assets in illiquid investments.

Nuveen Investments recently surveyed wealthy investors and found that their holdings closed-end funds have risen by 30% over the past year. In addition, they are also pouring more money into private equity. According to Private Equity Intelligence, a consulting firm, private equity has raised about $400 billion over the past two years.

What these two types of investments have in common is that they are highly illiquid—something that wealthy investors seem to be less concerned with.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.