Portfolio concentration and closed-end fund discounts: Evidence from the China market

Kalok Chan, Hung Wan KOT*, Desmond Li

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    3 Citations (Scopus)

    Abstract

    This paper provides an analysis of the determinants of the closed-end fund discount in Mainland China. We focus on the diversification level of closed-end funds as the investor clienteles for closed-end funds in Mainland China are different from other markets. Our empirical evidence shows that discount is strongly and negatively related to stock concentration as measured by the number of stocks in the fund or Herfindahl index. We also find the discount decreases with the dividend payout and turnover, suggesting that investors are willing to pay a higher price (lower discount) for a fund that pays more dividends and has higher turnover.

    Original languageEnglish
    Pages (from-to)129-143
    Number of pages15
    JournalEmerging Markets Review
    Volume9
    Issue number2
    DOIs
    Publication statusPublished - Jun 2008

    Scopus Subject Areas

    • Business and International Management
    • Economics and Econometrics

    User-Defined Keywords

    • China market
    • Closed-end fund
    • Discounts
    • Portfolio concentration

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