We have put together a list of frequently asked questions to help you better understand closed-end funds. Click on a question from the list to the right to learn more. Or, contact us directly.

What are closed-end funds?

Closed-end funds are investment companies that are offered through a Fund's initial public offering. These funds generally, have a fixed number of shares outstanding and are listed on a recognized exchange. After the initial public offering, you may purchase shares in the secondary market similar to individual stocks. They are generally, actively managed and invest in equities, debt, real estate, and other financial instruments.

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When should you choose closed-end funds?

If you're an investor who seeks diversification and trading flexibility, you may find closed-end funds a beneficial addition to your portfolio. As with all investment decisions, you should speak with your Financial Adviser to determine if a particular closed-end fund is appropriate for you.

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What are the benefits of closed-end funds?

Some of the key benefits of closed-end funds are:

• Professional management
• A variety of fund types and sectors that allow you to diversify your portfolio
• Liquidity through secondary market trading
• No minimum investment requirements
• Access to less liquid securities
• The ability for the funds to use leverage*

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Are there different types of closed-end funds?

Closed-end fund structures can vary and include perpetual, term or interval fund structures. The majority of funds are perpetual: which means they are designed to trade indefinitely, with no set termination date. Term trusts are closed-end funds with a defined maturity date. A fund utilizing an interval feature is structured to redeem a portion of their outstanding shares at Net Asset Value on a periodic basis.

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Do closed-end funds invest in sectors?

There are many different types of closed-end funds, including but not limited to:

• Index-based funds
• Taxable bond funds
• Diversified equity funds
• Municipal bond funds
• Preferred funds
• Convertible funds
• Real estate investment trust (REIT) funds

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What kind of return on investment can I expect from a closed-end fund?

This can vary greatly based on the investment objective and strategy of a fund. You should work with your Financial Adviser to determine which funds are appropriate for you given your investor profile, time horizon and risk tolerance. Investors should carefully read the Fund's prospectus, which includes a discussion of risk factors, fees and expenses, before investing.

The potential returns you may receive on a closed-end fund are based on the following:

• Appreciation or depreciation of the fund's share price
• Dividend income generated by the interest and dividend income the fund receives from the securities held in the fund's portfolio
• Realized capital gains distributions, which may be distributed to shareholders when a fund profits from selling securities

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How do closed-end funds compare with mutual funds?

Closed-end funds share many of the same attributes as open-end mutual funds:

• Diversification opportunities
• Professional fund management
• Management fees; generally charged as a percentage of NAV
• Distributions of realized capital gains
• Periodic dividends

In addition, closed-end funds have these features:

• Closed-end funds are issued generally through an initial public offering, traded on an exchange and have a limited number of shares outstanding
• May trade at a premium or discount to NAV
• They typically do not have back-end loads or 12b-1 fees. However, during an IPO a sales load is typically charged to the shareholder
• Exchange listed closed-end funds can be purchased or sold during exchange market hours
• Investors may pay a brokerage commission for closed-end fund transactions in the secondary market

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How can you get started?

If you are seeking a professionally managed investment for your portfolio that offers diversification, flexibility and liquidity, with access to a variety of investments and sectors that include markets otherwise available only to institutional investors, ask your Financial Adviser about closed-end funds.

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* Some closed-end funds employ leverage by issuing preferred stock or through borrowings to increase the amount of investable assets. The funds seek returns on these additional assets that are greater than the costs of the leverage employed and then pass the net benefit on to shareholders. Leverage increases potential return, but it also increases potential risk and increases potential volatility in a fund's net asset value, market price and yield.

Shares of closed-end funds sold in a fund's initial public offering are offered only by prospectus. Your Financial Adviser can provide you with more information, including a current prospectus that contains more complete details on investment company objectives, risks, fees, charges and expenses, as well as other information about the investment company and the underlying portfolios. Just like mutual funds, closed-end fund share prices fluctuate. At liquidation, they could be worth more or less than their original offer price. Please read the prospectus carefully and consider these factors before investing.

Shares purchased on an exchange after a fund's initial public offering are not pursuant to prospectus. Your Financial Adviser can provide additional information on closed-end funds purchased in the secondary market. The information contained herein is not an offer to sell any securities nor is it a solicitation of an offer to buy any securities.