Liquidity, Sentiment and Segmentation: A Survey of Closed-End Fund Literature

Abstract

Closed-end funds have been a topic of lively debate for several decades. In this paper we focus on studies relating to liquidity, sentiment and segmentation and, in particular, on studies that investigate closed-end country funds. We extend the previous survey by Dimson & Minio-Kozerski (1999) by adding in more recent contributions to the closed-end fund debate; and by including more of a discussion of sentiment, segmentation and country funds we complement the recent survey by Cherkes (2012). In addition I provide summaries of over 40 key papers in these areas, listing the sample and sample period, the theory examined and the findings of each paper.

Keywords: Asset Pricing, Closed-end Fund, Closed-end Country Fund, Investment Trust, Discount, Liquidity, Sentiment, Liberalization

JEL Classification: G12, G15, G23, F3