The reasons for investing in an open or closed-ended portfolio

Charles Stanley's Stephen Peters considers the pros and cons of selecting two very different investment styles and their potential performance

Closed-ended funds are said to be ‘better’ than open-ended funds for a variety of reasons. They include: Lower fees; Better performance; Better management; Fees more aligned with shareholder interest; Semi-permanent capital structure allows more illiquid strategies to be used. These claims are usually countered by criticisms investment trusts are illiquid, higher-risk vehicles with a limited choice of funds and several major sectors and asset classes with little to no coverage. In contrast, there are a large number of open-ended funds in most sectors, and units can be bough...