Tender offers and buybacks

In a tender offer the fund offers to buy back a percentage of its shares — often 5% to 25% — at a price expressed as a percentage of NAV on a valuation date (98% of NAV, for example). If more shares are tendered than the fund will buy, purchases are prorated.

Tenders are frequently the outcome of activist pressure or a standing policy to address persistent discounts. They are accretive to NAV per share when done below NAV, and they shrink the fund, which can reduce liquidity and raise the expense ratio afterward.

Open-market repurchase programmes are more modest: the board authorises buying up to a percentage of shares when the discount is wide, at management's discretion. Authorisation is not execution; the shareholder report shows what was actually bought.

Tender documents (Schedule TO) are filed with the SEC and linked from each fund's Documents tab and the Corporate Actions section.