What the papers from your fund mean

Something came in the post

• A letter about a buy-back came in the post - what now
  The fund has offered to buy back some of its shares. Here is what the letter means, what your choices are, and how the broker part works.
• Voting papers came in the post - what now
  Most years the vote is routine. Some years it decides something that changes what you own. Here is how to tell which, and what your vote does.
• An offer to buy more shares came in the post - what now
  The fund is selling new shares to its existing holders, usually below the current price and for a short time. You can buy, sell the right to buy, or do nothing.
• My fund pays the same amount every month - where does it come from?
  Many funds set a fixed payout and keep it whether or not the holdings earned that much. The fund tells you, in a notice each month, what the money was made of.
• My fund's shares stopped trading on the exchange - what now
  A fund can leave the exchange because it closed, merged, became a regular mutual fund - or because it chose to go quiet. What you hold depends on which.

The numbers on my fund's page

• My fund pays out more than it earns - is that my own money coming back?
  A fund can pay a set amount each month whether or not it earned that much. The yearly report says how much of the payout was income and how much was not.
• How to read what a fund costs
  Two numbers matter: what the managers charge, and the total including interest on money the fund borrowed. Here is how to compare them.
• Why my fund's price moves more than its holdings - borrowing
  Most closed-end funds borrow to buy more holdings. That lifts the income and the risk together. Here is how much, and what it costs.
• The share price is below what the fund owns - what that gap means
  A closed-end fund's shares trade at whatever buyers pay, often 5% to 15% less than the value of its holdings. The gap is the reason large investors come knocking - and the reason buy-backs and closings pay out.
• How to read the yearly report in ten minutes
  The report is long. Six pages of it answer the questions a holder actually has. Here is where they are.
• Funds with an end date in their name
  Some funds promise to close on a set date, years ahead. The date is in the name. Here is what that promise means and how funds change it.

Large investors and big changes

• A large investor bought into my fund - what does it mean
  An investor who owns 5% or more of a fund must tell the regulator, and must say whether it may push for changes. Here is what that notice means for you.
• A large investor is pushing for changes - what usually happens next
  Sometimes nothing for a year. Often a buy-back offer, a vote, or a plan to close or merge. Here is the pattern, with what followed at real funds.
• My fund is closing down or joining another fund - what do I get and when
  A fund that closes sells everything and pays the cash out. A fund that joins another hands you shares of the other fund. In both cases the value per share is what you get.
• My fund is becoming a regular mutual fund - what changes
  Holders vote on turning the fund into one you can sell back to the fund at full value on any day. The gap between price and value disappears - and so do some of the fund's features.

The words

• The words in the letter, and what we call them
  Fund papers use formal words. This is the same list in ours, so you can read the letter and this site side by side.

Check your own fund

Type the ticker or the name from your statement. The fund's page says whether any of this is happening there, and when.

We cover 360 U.S. closed-end funds. The words we use are explained on one page.