While no one is yet holding out exchange-traded funds as a cure for the common cold, some are touting ETFs as a cure for the common closed-fund discount.

The Wall Street Journal's Fund Track column reports the case of First Trust Advisors, which is planning to convert two closed end funds into ETFs. The two funds -- First Trust Value Line Dividend Fund and First Trust Value Line & Ibbotson Equity Allocation Fund -- have each traded at a persistant discount, a condition that would be eliminated by the conversion.

Shareholders for the fund are expected to vote on the matter before December 15, and, if approved, the conversion will happen by the end of next January.

The paper adds that PowerShares Capital Management filed for a patent on an automatic process used to convert a closed-end fund into an ETF, so the idea may have a future. 

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