When the SPDR S&P 500 (ARCA:SPY) debuted in 1993, a huge growth industry was born. Exchanged-traded funds (ETFs) have become the go-to fund format for many investors looking to access new asset classes and strategies. More than $1 trillion worth of assets now sit in ETFs, and the industry continues to produce new and innovative fund types. However, many investors may find that focusing their research on ETFs' quirkier cousins could provide the same assets and strategies at a nice discount.

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Assets on Sale
Though often wildly misunderstood, closed-end funds (CEFs) could be a great way to add many of the same strategies and assets available in ETFs at discount prices. Unlike ETFs, which have a creation and redemption mechanism, CEFs trade on the equities markets with a fixed number of shares. Investors can think of them as a cross between ETFs and mutual funds. After their IPO's and this fixed share nature, CEFs can and often do trade for discounts to their net asset values (NAV), allowing investors to pick up stocks for pennies on the dollar. For example, if a CEF is trading at a 10% discount to its NAV, you effectively get a dollar's worth of assets for 90 cents. (To know more about CEFs, read Open Your Eyes To Closed-End Funds.)

Opportunistic investors can then exploit these discounts and valuable exposure to everything from commodities and infrastructure assets to international equities and municipal bonds. Investors have the potential for outsized gains if prices skyrocket, but also have downward protection knowing they purchased these assets at a deep discount to what they are worth.

Shopping the Clearance Section
While there are some more complex issues when dealing with CEFs, such as return-of-capital distributions and leverage, the deep discounts available from many funds could make these eccentricities worth while. Even those looking to add a broad swath of CEFs to a portfolio could benefit from the discounts. For example, the ETF-based PowerShares CEF Income Composite (ARCA:PCEF) tracks 123 CEFs. Meanwhile, the CEF-based Cohen & Steers Closed-End Opportunity Fund (NYSE:FOF) tracks similar holdings at a nearly 10% discount. For investors, CEFs could be exactly what the doctor ordered. Below are a few picks.

As a variety of emerging and developed market nations have begun taking serious stock in their aging and growing infrastructure needs, the theme remains a hot topic. To that end, investors have embraced broad infrastructure ETFs like the SPDR FTSE/Macquarie Global Infrastructure 100 (ARCA:GII). Trading at a 13% discount to its assets, the MQ Global Infrastructure Total Return Fund (NYSE:MGU) follows 46 different utilities, airport, pipeline and toll-road firms across the globe. The CEF yields nearly a whole percentage point more versus the SPDR ETF. Similarly, the newly IPO'd Brookfield Global Listed Infrastructure (NYSE:INF) can be had for a 10% discount and 8.63% yield.

Perhaps some of the best bargains can be found with regards to superstar managers. Franklin Resources' (NYSE:BEN) Mark Mobius is considered by many to be the emerging markets guru. However, all of his traditional mutual funds come with a 5.75% sales load. His Templeton Emerging Markets Fund (NYSE:EMF) is run almost identically to his signature mutual fund, but can be had with a 9% discount. Similarly, Whitney George at Royce Associates has proved his worth time and time again within the small cap sector. The Royce Focus Trust (Nasdaq:FUND) allows investors to tap his best ideas for a deep 13% discount. (To know more about small cap stocks, read: An Introduction To Small Cap Stocks.)

The Bottom Line
For investors, the ETF boom has provided the opportunity to access some unique and different asset classes. However, by looking at their CEF cousins, portfolios can gain access to some deep discounts for many of the same holdings. By choosing the GDL Fund (NYSE:GDL) versus the IQ Merger Arbitrage ETF (ARCA:MNA), investors can get more for their buck. The previous examples are a great way to do just that.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.