What can “nine-eleven” Tell us about closed-end fund discounts and investor sentiment?

Timothy Burch, Douglas Emery, Michael E. Fuerst

Research output: Contribution to journal › Article

16 Citations (Scopus)

Abstract

We use the horrific events of September 11, 2001 (“nine-eleven”) as a natural test of the hypothesis that closed-end mutual fund discounts from fund net asset values reflect small investor sentiment. Because nine-eleven was a sudden, unforeseen, and significantly negative and exogenous shock to the world, the capital markets, and investor sentiment, our test avoids many of the problems of extant studies. Discounts worsened dramatically following the event, and then recovered alongside the broader market. This finding is consistent with the hypothesis that discounts reflect the sentiment of small investors, who took their cues from the broader market’s overall movement.

Original languageEnglish (US)
Pages (from-to)515-529
Number of pages15
JournalFinancial Review
Volume38
Issue number4
DOIs
StatePublished - Jan 1 2003

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Discount
Closed-end funds
Investor sentiment
Capital markets
Investors
Mutual funds
Exogenous shocks
September 11 attacks
Asset value
Market sentiment
Sentiment

Keywords

  • Closed-end fund discounts
  • Investor sentiment

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

What can “nine-eleven” Tell us about closed-end fund discounts and investor sentiment? / Burch, Timothy; Emery, Douglas; Fuerst, Michael E.

In: Financial Review, Vol. 38, No. 4, 01.01.2003, p. 515-529.

Research output: Contribution to journal › Article

Burch, T, Emery, D & Fuerst, ME 2003, 'What can “nine-eleven” Tell us about closed-end fund discounts and investor sentiment?', Financial Review, vol. 38, no. 4, pp. 515-529. https://doi.org/10.1111/1540-6288.00058
Burch T, Emery D, Fuerst ME. What can “nine-eleven” Tell us about closed-end fund discounts and investor sentiment? Financial Review. 2003 Jan 1;38(4):515-529. https://doi.org/10.1111/1540-6288.00058
Burch, Timothy ; Emery, Douglas ; Fuerst, Michael E. / What can “nine-eleven” Tell us about closed-end fund discounts and investor sentiment?. In: Financial Review. 2003 ; Vol. 38, No. 4. pp. 515-529.
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