The information content of closed-end country fund discounts
DOI:
https://doi.org/10.1016/S1057-0810(00)00064-0Keywords:
Investor sentiment, Closed-end fund, DiscountAbstract
This paper examines whether premiums and discounts on closed-end country mutual funds (CECFs) contain useful information about future returns. We find that higher CECF premiums are associated both with higher future returns on the relevant foreign market index and with higher future NAV returns after controlling for the foreign market return. CECFs trading at large discounts are not necessarily bargains, because their future NAV performance can be expected to be relatively poor. © 2000 Elsevier Science Inc. All rights reserved.
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