File Name: investor sentiment and the closed end fund puzzle .zip
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Don't have an account? Begins by describing the closed end fund puzzle and enumerating some of the standard accounts that have been used to explain it. Then, applying the model developed in the previous chapter, the author comes to the conclusion that the apparent puzzle could be interpreted in terms of the influence of individual investors sentiments on securities prices. This interpretation, in turn, provides some useful hypotheses that are tested with evidence from the US, proving that behavioural finance theory can provide testable predictions. Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter. Please, subscribe or login to access full text content.
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This paper examines the proposition that fluctuations in discounts on closed end funds are driven by changes in individual investor sentiment toward closed end funds and other securities. The theory implies that discounts on various funds must move together, that new funds get started when seasoned funds sell at a premium or a small discount, and that discounts on the funds fluctuate together with prices of securities affected by the same investor sentiment. The evidence supports these predictions. In particular, we find that discounts on closed end funds narrow when small stocks do well, as would be expected if closed end funds were subject to the same sentiment as small stocks, whim tern.
This paper examines the proposition that fluctuations in discounts on closed end funds are driven by changes in individual investor sentiment toward closed end.
Mutual funds, which are formed for the purpose of investments, are made up of a pool of funds gathered from many investors, which are then reinvested, on their behalf in different securities. Such funds give small investors the ability to participate in professionally managed and diversified portfolios of securities which would otherwise be difficult to achieve with a small amount of capital. Mutual funds are classified into close-end funds and open-end funds. What differentiates the two types is that in a close-end fund the number of issued securities and shares that are traded on the stock market are fixed. Therefore, the shares which are bought by the investors are non-redeemable thus when an investor wishes to liquidate their shares they can only do so by selling it to other investors in the fund. The price of the shares traded in the find are determined by the supple and demand of the market. In a close-end fund, the Net Asset Value per share is used to determine the market value of assets the fund holds.
This is a preview of subscription content, access via your institution. Rent this article via DeepDyve. Black, Fisher. Google Scholar. Brauer, Greggory A.
The theory implies that discounts on various funds move together, that new funds get started when seasoned funds sell at a premium or a small discount, and that discounts are correlated with prices of other securities affected by the same investor sentiment. The evidence supports these predictions. In particular, the authors find that both closed-end funds and small stocks tend to be held by individual investors, and that the discounts on closed-end funds narrow when small stocks do well. Copyright by American Finance Association. Bibliographic data for series maintained by Wiley Content Delivery.
A closed-end fund CEF or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. In the United States, closed-end funds sold publicly must be registered under both the Securities Act of and the Investment Company Act of Closed-end funds are usually listed on a recognized stock exchange and can be bought and sold on that exchange. The price per share is determined by the market and is usually different from the underlying value or net asset value NAV per share of the investments held by the fund.
Download to read the full article text. Black, Fisher. Google Scholar. Brauer, Greggory A.
Turkish English French German Italian. Closed-end funds are found to be trading at a discount in this market as well but the size of the discount on Turkish closed-end funds is much larger. Findings of this paper provide partial support for the investor sentiment hypothesis.
Investor sentiment can represent trading on noise rather than news (Black ()) or trading on popular models (Shiller. ()). In the case of closed-end funds,.Leah R. 28.05.2021 at 23:22
A funny thing happened on a way to the forum script pdf crew resource management for the fire service pdfLaura A. 01.06.2021 at 13:08
Lee, Charles M. C., Andrei Shleifer, and Richard H. Thaler. “Investor Sentiment and the Closed-End Fund Puzzle.” The Journal of Finance 46 (1) (March).