Written by Nick Ackerman, co-produced by Stanford Chemist
Now that the majority of online brokers feature $0 commissions, it is important to focus on what features and services brokerages can offer to investors. One important discussion that has cropped up is participation in fund-sponsored DRIPs. These can allow investors discounted shares for participating in reinvestment plans. This happens when shares are trading at premium levels for a CEF. I would say the majority of CEF sponsors do have some sort of discounted DRIP available.
The only problem with this – some brokers don’t offer participation in these programs – some don’t even offer reinvestment at all. Additionally, the process for getting reinvestment going is different for different companies.
It is important to consider the importance of reinvesting. Even if it is just “manually” reinvesting. That would be taking the distributions as cash and investing where one sees fit. We have