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Commodities Briefing - Categorized | Financial, Investment more

Why pay a premium for a commodity?

Posted on 31 March 2011

Why would anyone pay more for precious metals than they’re worth? That’s the mystery confronting investors looking at several closed-end bullion funds that now change hands well above the market value of the assets they hold.
Unlike mutual funds or exchange-traded funds, closed-end funds issue only a limited number of shares (hence the “closed-end” label). Because their share price is determined by investors’ enthusiasm, rather than being tied to the value of the underlying assets, it’s not unusual for closed-end funds that invest in stocks or bonds to stray from their NAV………………………………………Full Article: Source


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