Cuba’s CEF Surges After Castro’s Resignation
February 20th at 12:00pm by Tom Lydon
Cuban Dictator Fidel Castro’s transfer of power to his brother could have a positive effect on Cuba’s closed-end fund (CEF). Rumors of Castro’s demise last May seemed to. And where is the Cuban exchange traded fund (ETF)?
The Herzfeld Caribbean Basin Fund (CUBA) seeks to profit from the resumption of U.S. trade with Cuba, reports Elizabeth Stanton for Bloomberg. After Castro’s resignation, the fund surged 17% – the most in its 13-year history. Since September 2007, though, it’s fallen 33.1%. Its average annual return over the last 10 years is 7.3%.
Don’t expect trade with Cuba to resume anytime soon, though. After all, one Castro has handed control of his country to another Castro. Congress will consider lifting the embargo only when Raul Castro restores property, voting and human rights to the citizens of Cuba, reports Joanne Von Alroth for Investor’s Business Daily.
For now, it’s a game of wait-and-see.
Closed-end funds generally don’t continuously offer their shares for sale, and when they are for sale, they may not sell near their net asset value (NAV). Shares are often not redeemable, meaning that a fund isn’t required to buy back its shares upon request.
