Empirical Research On The Discount Of Closed-end Funds In Our Country

Closed-end funds discounts, which is a widespread witnessed all over the world and also a puzzle in financial field, displays a phenomenon that the closed-end funds are always traded with prices lower than their net asset value.Even though the foreign economists have proposed several hypotheses in existing studies, there still exists no perfect and reasonable explanation against the puzzle since the complexity of the markets and the particularity of different countries. The closed-end funds discounts are much more obvious and deeper in China,so it is necessary and important to study the problem based on the reality of Chinese stock market. The paper starts with a review of the previous studies and a history display of the closed-end funds in our country, then the characteristics of the closed-end funds discounts phenomenon in China is generalized through the statistics of the history discounts data, and the article also proves that the discounts in our country are much more deeper than in others'.We try to discuss the explanations of this phenomenon from two aspects:the investor's rational expectations and the noise trade.Given that noise is hard to measure,the article investigates the investors'sentiment influence on discounts mainly through the three aspects followed,namely the relationship of various closed-end funds discounts and their changes,the time that new funds choose to get started,and the relationship of discounts changes with the returns on stocks of smaller capitalization.Eventually,several suggestions are offered such as promoting the development of our country's closed-end fund,making sure the trade price of fund on a rational track and standardizing the management of the fund company.