New CEF offering - new idea, or same old same old?

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tman9999
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Joined: Tue May 20, 2008 1:06 pm

New CEF offering - new idea, or same old same old?

Post by tman9999 »

Saw this announcement today for a BlackRock/Prism offering of a 4 year closed end fund, offering 7% income return, DRIP option, and managed via BlackRock's institutional arm. 1% annual fee plus "up to 0.5%" administrative fee.

After researching a few threads about CEFs here as well as skimming through with Wiki entry on them, I'm curious as to whether this sounds like more of the same, or represents something different for retail investors. Haven't dipped into the prospectus yet - figured I'd see if anyone here might share their thoughts on whether these things are sometimes worth a look, or are to be avoided.
https://yieldstreetprismfund.com/

I like the idea of 7%. And I don't mind locking up some money for 48 months to get it. Given our income is about to drop when my wife leaves her job, the tax effect of that return won't hurt us. For 1.5%, sounds like it could be worth a look.
Thanks for any thoughts.
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indexfundfan
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Re: New CEF offering - new idea, or same old same old?

Post by indexfundfan »

Distribution yield of 7% doesn't guarantee that the fund can earn 7% each year. The fund could also distribute "return of capital".

If you really want to buy the CEF, do not buy it during the IPO, because most new CEFs will trade with a discount after the IPO.
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Topic Author
tman9999
Posts: 72
Joined: Tue May 20, 2008 1:06 pm

Re: New CEF offering - new idea, or same old same old?

Post by tman9999 »

indexfundfan wrote: Tue Feb 18, 2020 5:01 pm If you really want to buy the CEF, do not buy it during the IPO, because most new CEFs will trade with a discount after the IPO.
Thanks for that - so sounds like more of the same (the other posts I read mentioned trading at a discount).
Thanks!
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