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

Timothy R. Burch, Douglas R. Emery, Michael E. Fuerst

Research output: Contribution to journalArticlepeer-review

18 Scopus citations


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
Issue number4
StatePublished - Nov 2003


  • Closed-end fund discounts
  • Investor sentiment

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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