Closed-end funds, a type of publicly traded investment fund, are offering enhanced yields for income-seeking investors, according to DoubleLine CEO Jeffrey Gundlach. These funds trade throughout the day, have a limited number of shares, and often use leverage to boost returns. Gundlach highlights their advantages in a moderate risk environment, with discounts and the potential for double-digit yields available without significant credit risk.
The United States is facing a severe debt crisis, with a projected debt of $34 trillion by year-end. This unsustainable debt burden is draining the economy, with the government spending billions on interest payments alone. The Federal Reserve’s interest rate hikes are exacerbating the situation, raising borrowing costs and fueling inflation. Experts warn that unless spending is cut or taxes are raised, the country could face a financial crisis.
A new fund called Destiny Tech100, designed to provide retail investors access to private companies like SpaceX, has experienced a surge in demand, resulting in significant premiums and confusion on the Robinhood brokerage platform. The fund, which trades under the ticker DXYZ, has seen its share price fluctuate dramatically despite the underlying valuation of its holdings remaining largely stable, raising concerns about its sustainability. Robinhood, which initially allowed trading of the fund, has since restricted transactions, further adding to the confusion. Experts attribute the premium to high demand from retail investors seeking to access private markets and speculate on the potential growth of tech companies, even as public tech stocks experience challenges.
