IMO the benefits of a CEF are: 1. You don’t have the common phenomena where when a fund is hot bazzillions of dollars buy into the fund thus diluting it’s subsequent performance. There are only “x” many shares with a CEF and the fund managers challenge is to make them grow or die. The OEF manager gets paid as a result of assets under management, so he’s chasing the bazillions of dollars, and fund performance is really secondary (and it shows). 2. Given their leverage (and possibly other factors) the CEFs out pace OEFs (and often the market) on the way up, and the way down. Compared to an OEF, commonly a lot. 3. You can actually get distributions from a CEF - monthly, quarterly, yearly, depends on the fund. With an OEF the divys paid, for example by REITs, which are substantial, just somehow disappear in operating expenses. There are divys with OEFs, they are commonly once a year and modest. 4. With a CEF you don’t have all the bonehead restrictions where, for example, you might have to hold a fund 180 days before you can sell your shares, or you can’t do more than 4 trades/year. You can get in, you can get out, you decide.
Benefits of OEF (IMO): 1. Pricing is much more stable and not nearly as capricious as the market. Most OEF NAVs don’t price change hugely on any day. However, don't think that you can't lose a bunch with OEFs; I've seen some liquidate/merge. 2. No fees to buy in or sell out (sometimes there are loads - avoid ‘em). If you’re dribbling money into the OEF or CEF the transaction fees on a CEF can eat your lunch, it’s free with an OEF, but there may be minimal sizes for a transaction, and to open an account. At the same time don’t think you are going fee-light with an OEF, remember all those disappearing divys, H1B fees, etc.
Other factors: I think there is a disadvantage of CEFs in comparison to most stocks: often they are somewhat illiquid. There are a lot of CEFs that only trade a few thousands or tens of thousands of shares a day. If you want to sell a bunch, it can be a big problem. If you want to buy, there may, or may not be, a big spread in the bid/ask. If you do go with CEFs, I recommend against over-indulging in many thousands of shares in any one fund - you could have trouble getting out of that position, be sure to assess liquidity if you decide to go w a CEF.
CEFs have a number of factors you have to be aware of and consider. For example their premium or discount to NAV, and whether it’s growing or shrinking. Or whether any distribution they make is coming out of capital as opposed to just interest or divys they’ve received. OEFs are a lot simpler, they price and redeem based on NAV and there are commonly only small divys to worry about.
For me, I want whatever fund I’m in to perform, I’m not here to subsidize some management company. But commonly if a fund is performing Smart Money, or someone, will spot it, highlight it, and a bazillion dollars will flow to the fund - making the fund managers filthy rich (they’re happy) but destroying it for my purposes (a performing investment). So OEFs don’t commonly work for me - in fact I think the dirty little secret is that OEFs commonly don’t work for anyone (they often really underperform the market). CEFs are more complex and require more awareness and understanding, but they can perform.