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!

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Watchlist – Royce Micro-Cap Trust (RMT)

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