I’m adding a closed end fund to the watchlist.
music selection: “Do Ya” — Electric Light Orchestra
weigh-in: 218.0 +0.6
Royce Micro-Cap Trust (RMT) is a micro-cap closed end fund. It historically beats the Russel 2000 by a small margin with less volatility. As a closed end fund, it sometimes trades for a discount to Net Asset Value (NAV). This presents a great opportunity; buy assets at a discount. The current discount is attractive: 17.42%. I think we can do even better though. I’m setting a target to buy below 20% discount to NAV. At the most recent reported NAV, that would be a price of 6.56. Check the current NAV at the website before buying though.
The micro-cap space can give a portfolio some diversification. Especially for those who use market cap weighted indexing. The fund is currently sporting a 17 cent quarterly dividend. That indicates over a 10% yield on cost. The fund also regularly pays a larger dividend at year end including pass through of short and long term capital gains. This one could be quite good if bought cheaply enough.
Devour your prey raptors!