ASA Gold and Precious Metals Limited (ASA) stands out among closed-end funds (CEFs), but not for favorable reasons.

For starters, this gold-oriented CEF distributes almost no dividend (its yield sits at a slim 0.14 percent currently). That sets it apart from typical CEFs, which investors often select for elevated payouts. At present, the holdings in my CEF Insider service deliver an average yield of 8.9 percent.

As the name indicates, the fund primarily offers exposure to physical gold (64.2 percent of assets). Silver comprises another 5 percent, while gold-mining equities fill most of the balance. This allocation clearly does not suit income seekers, since precious metals generate minimal distributions.

Even so, many prospective ASA buyers focus less on income: The fund's core draw has long been its gold allocation, which propelled ASA to the top CEF performer of 2025. As shown below, the fund (in purple) far outpaced the benchmark State Street SPDR S and P 500 ETF Trust (SPY).

ASA Capitalized on Gold for Strong Gains in 2025

Gold experiences such surges periodically: In 2009, 2019 and once more in 2025, the metal advanced amid inflation worries, geopolitical tensions and assorted concerns.

That proved beneficial for ASA holders last year. This year? Less so.

As illustrated in purple below, the SPDR Gold Shares (GLD) ETF, a solid stand-in for gold prices, remains flat year to date, trailing SPY's 10 percent advance.

Gold Trails Equities in 2026

The lackluster showing occurs amid notable uncertainty, particularly on inflation. With the Iran situation escalating and the Strait of Hormuz shut, oil prices climbed, lifting the consumer price index. Such conditions usually lift gold, yet it stays level.

ASA itself has delivered a total return near 3 percent so far.

What explains this? In short, today's uncertainty and volatility were already factored in earlier, a frequent pattern for gold. Consequently, gold's upside potential appears limited now and may stay constrained for some time.

Given that backdrop, ASA's pullback likely has further to run, making the fund one to sidestep over the longer haul. Additional concerns exist beneath the surface as well.

More Than Just Tepid Gold

While ASA may lag because gold seems constrained, the fund also resembles a value trap at present levels. In other words, it appears inexpensive at first glance but is, in my assessment, inexpensive for valid reasons.

Consider the details, beginning with ASA's discount to net asset value (NAV, representing the worth of its holdings). Currently it measures 13.9 percent, suggesting entry at roughly 86 cents per dollar of assets.

Yet deeper review is warranted. That discount aligns closely with the fund's five-year average, offering no notable departure. One aspect that could still draw attention is that ASA's discount appears to have troughed in late April and has begun to tighten (in the typical two-steps-forward, one-step-back manner).

Did ASA's Discount Truly Reach a Low in April?

Often this setup proves constructive: Even if a CEF's holdings show little promise of recovery, the fund can still post gains if investors recognize an excessive discount to NAV and bid up the share price.

That process seems underway here. However, internal frictions suggest the narrowing may prove temporary.

Specifically, the fund's COO, Axel Merk, resigned on June 11. In his publicly released letter, Merk raised governance issues, noting that certain officers were barred from board meetings and that succession plans for departing key managers were not shared with him.

ASA countered Merk's letter in its own statement.

This development points to a potential widening of the discount going forward (which would pressure ASA's market price). The absence of a sharp reaction so far stems from CEF investors typically reacting more slowly to developments than equity investors do.

Regardless of the outcome, I view the fund as best avoided for the time being. Fortunately, numerous other CEFs exist across varied asset classes that deliver far higher yields than ASA.

This Strong Monthly Dividend Strategy Delivers 60 Payments Annually, Yielding 9.7 Percent

Another overlooked point? Beyond much larger dividends than ASA, many CEFs distribute payouts monthly.

I have simplified the search for the strongest of these high-yielding monthly payers: My top five selections among monthly CEFs now form a portfolio called the 60-Paycheck Dividend Strategy.

As the title implies, these five funds each issue one dividend per month, resulting in five payouts monthly and 60 dividend distributions across a full year.

The appeal grows because these five funds generate substantial dividends, averaging a 9.7 percent yield.

That returns nearly 10 percent of the initial investment annually, paid in 60 installments. Apply the proceeds to expenses or reinvest to expand the income stream further, as preferred.

Visit the link for an overview of the five funds in this 60-Paycheck Dividend Strategy along with a complimentary report listing their names and tickers.

Further ASA Research:

Warren Buffett Dividend Stocks
Dividend Growth Stocks: 25 Aristocrats
Future Dividend Aristocrats: Close Contenders

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.