EXPLORING
CLOSED-END FUNDS
EXPLORING
Closed-end funds (CEFs) may offer important benefits to investors, including the potential for consistent income, diversification and professional management.
CEFs are investment vehicles with a unique structure that can offer certain advantages relative to open-end mutual funds and exchange-traded funds (ETFs). Many CEFs may have the opportunity to invest for higher yields using strategies and securities that many mutual funds and ETFs cannot.1
What makes closed-end funds unique?
Pursue higher
distribution rates
CEFs typically pursue strategies designed to maximize yield and pay income to shareholders on a monthly or quarterly basis.
Intraday liquidity
Shares of CEFs trade like a stock throughout the day on an exchange, while most open-end fund shares only trade once a day when the market closes.
Access to a broader
range of securities
Because they have a fixed pool of assets, CEFs can own higher yielding, less liquid investments that are not typically available to the public, such as private credit. This brings with it a higher degree of risk.
Leverage*
Unlike open-end funds, many CEFs can utilize higher leverage limits in an effort to maximize their yield and return potential.
Shares trade at a premium or discount
After the initial public offering of a CEF, the fixed number of shares trade on the open market. The market price for CEF shares may be higher or lower than the net asset value (NAV). This is known as trading at a premium or a discount.
* Use of financial leverage creates an opportunity for increased income and capital growth for shareholders but, at the same time, creates special risks, and there can be no assurance that a leveraging strategy will be successful during any period in which it is employed.
The use of leverage may magnify the portfolio's gains or losses.
Because CEF portfolio managers don’t have to sell securities to meet redemptions — or buy securities to put new money to work — they can invest the assets consistently according to their management style and strategy.
This enables CEFs to pursue more sophisticated strategies, invest in less frequently traded securities, and employ leverage in an effort to increase income and returns. CEFs typically make monthly or quarterly distributions to shareholders at a predetermined level of yield.
Investor Education
Learn more about closed-end fund structures, options and strategies to help guide
your investment decisions and goals.
Read more about closed-end funds and how they work:
Our CEF Products
BNY Mellon Municipal Bond Infrastructure Fund, Inc. (DMB)
Provides investors a monthly federal tax-exempt dividend by investing in a mix of high quality and high yielding municipal bonds.
Benchmark
Bloomberg U.S. Municipal Bond Index
Ann. Dist. Rate
4.55%
As of 08/31/25
Premium/Discount
-9.06%
As of 09/12/25
BNY Mellon High Yield Strategies Fund (DHF)
Provides high current income for today’s yield-challenged market.
Benchmark
ICE BofA US High Yield Constrained Index
Ann. Dist. Rate
8.08%
As of 08/31/25
Premium/Discount
-7.14%
As of 09/12/25
BNY Mellon Strategic Municipal Bond Fund, Inc. (DSM)
Provides investors a monthly federal tax-exempt dividend by investing primarily in high quality municipal bonds.
Benchmark
Bloomberg U.S. Municipal Bond Index
Ann. Dist. Rate
4.86%
As of 08/31/25
Premium/Discount
-7.80%
As of 09/12/25
BNY Mellon Strategic Municipals, Inc. (LEO)
Provides investors a monthly federal tax-exempt dividend by investing primarily in a mix of high quality and high yielding municipal bonds.
Benchmark
Bloomberg U.S. Municipal Bond Index
Ann. Dist. Rate
4.64%
As of 08/31/25
Premium/Discount
-8.58%
As of 09/12/25
For more details on our closed-end funds
WHY INVEST WITH US
The Strength of BNY Investments
Since 1987, BNY Investments has offered CEF solutions designed to seek attractive, consistent yields and help investors meet their income needs.
Our municipal fixed income, high yield and global strategic income funds draw on the expertise of our investment managers, backed by the strength and global presence of BNY Investments.
With about $2 billion2 in CEF assets under management and an active approach to generating income, BNY Investments can be your source for attractive yields from high quality fixed income securities.
Explore our full lineup of closed-end funds.
Ready to learn more about how closed-end funds can help you pursue your goals?
Contact BNY Investments at 800-373-9387
1 Source: Closed-End Fund Association, “Advantages of CEFs,” CEFA.com.
2 Source: BNY Investments as of 9/30/2024.
Closed-end fund shares (CEFs) are not deposits or obligations of, or guaranteed by, any bank and are not insured by the FDIC or any other agency. CEFs are subject to investment risk, including possible loss of principal amount invested. An investment in the fund may be speculative and it involves a high degree of risk. No assurance can be given that a fund will achieve its investment objective. An investment in CEFs presents a number of risks and is not appropriate for all investors. Investors should carefully review and consider potential risks before investing.
Shares of closed-end funds (CEF) are sold in the open market through a stock exchange. Shares may only be purchased or sold through registered broker/dealers. Closed-end funds, unlike open-end funds, are typically not continuously offered. An investment in CEFs presents a number of risks and is not appropriate for all investors. Investors should carefully review and consider potential risks before investing. Closed End Funds (CEFs) are exposed to much of the same risk as other exchange traded products, including liquidity risk on the secondary market, credit risk, concentration risk and discount risk. Shares of closed-end funds frequently trade at a market price that is below their net asset value. This is commonly referred to as “trading at a discount.” This characteristic of shares of closed-end funds is a risk separate and distinct from the risk that the fund’s net asset value may decrease.
Buying or selling CEF shares on an exchange may require the payment of brokerage commissions.
The closing price and net asset value (NAV) of a fund’s shares will fluctuate with market conditions. Closed-end funds may trade at a premium to NAV but often trade at a discount. CEF shares are bought and sold at “market price” determined by competitive bidding on the stock exchange. At the time of sale, your shares may have a market price that is above or below NAV and may be worth more or less than your original investment. NAV is the value of all fund assets, less liabilities divided by the number of shares outstanding.
CEFs are exposed to much of the same risk as other exchange traded products, including liquidity risk on the secondary market, credit risk, concentration risk and discount risk. If the CEF includes foreign market investments, it will be exposed to the typical foreign market risks, including currency, political and economic risk. CEFs are subject to market movements and volatility. The value of a CEF can decrease due to movements in the overall financial markets. Changes in interest rate levels can directly impact income generated by a CEF. Funds that have a portfolio with a significant allocation to fixed income assets, like bonds, may be more exposed to this type of risk as interest rates change. Asset allocation and diversification cannot assure a profit or protect against loss.
Tax consequences of dividend or capital gain distributions may vary by individual taxpayer. There is no guarantee that dividends will be paid. You should not draw any conclusions about the Fund’s investment performance from the amount of the fund’s distributions. Trading CEFs will also generate tax consequences and transaction expenses. This information is general in nature and is not intended to constitute tax advice. Please consult your own legal or tax advisor for more detailed information on tax issues and advice as they relate to your specific situation.
Annualized Distribution Rate - It represents the latest declared regular distribution, annualized, relative to the market price as of quarter end. Special distributions, including special capital gains distributions, are not included in the calculation. Distributions are sourced entirely from net investment income, unless otherwise noted. Leverage is an investment strategy that uses borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.
This material is for informational purposes only and should not be considered as investment advice or a recommendation of any particular investment, strategy, or investment manager. Please consult with you own tax, legal or financial professional regarding your particular situation.
For additional information on a fund, please refer to the fund’s most recent shareholder report.
BNY Mellon Investment Adviser, Inc. is the investment adviser of BNY Mellon Municipal Income, Inc., BNY Mellon Municipal Bond Infrastructure Fund, Inc., BNY Mellon Strategic Municipal Bond Fund, Inc., and BNY Mellon Strategic Municipals, Inc. and has engaged its affiliate, Insight North America LLC to serve as the funds' as a sub-adviser.
BNY Mellon Investment Adviser, Inc. is the investment adviser of the BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc., and BNY Mellon High Yield Strategies Fund and has engaged Alcentra NY, LLC as a sub-adviser. Alcentra NY is not affiliated with The Bank of New York Mellon Corporation.
BNY Mellon Investment Adviser, Inc., Insight North America, LLC, and BNY Mellon Securities Corporation are subsidiaries of The Bank of New York Mellon Corporation.
BNY and Bank of New York Mellon are the corporate brands of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally.
© 2024 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286.
Not FDIC-Insured | No Bank Guarantee | May Lose Value
MARK-593325-2024-08-15