Leverage has been a profitable trade in the past and it has allowed many closed-end funds to deliver very compelling yields, but the risk is your total return could suffer. Leverage can cut both ways it can magnify your gains but it can also accentuate your losses. ... On the flip side, if you are delving into these more unusual strategies, one could argue the closed-end format lends itself to them pretty well, because your manager is not having to redeem shares everyday.
More Quotes from Christine Benz:
A lot of the large growth stocks are taking a breather.Christine Benz
We're hearing from a lot of value-oriented managers that they're taking this opportunity to move into stocks with growth prospects. My goodness, Cisco is in the portfolio right now, which isn't something that Windsor shareholders might be expecting.
Christine Benz
Internet-heavy funds took some of the biggest hits yesterday, but most people watching the tech area have long thought that there's probably been some froth among those stocks.
Christine Benz
It has been hard to go wrong in stocks. The main performance determinant was whether you invested in small caps.
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It's a classic rotation away from everything that did well in 1998 and the first quarter of 1999. Everything that did lousy in that time has picked up.
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Fund companies are increasingly looking at this as a retention tool. Perhaps its one way to keep your fund manager on board. I don't know if it's a full blown turning point, but companies realize it could be a brain drain so they're taking steps to stay competitive.
Christine Benz
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