Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Why do closed-end funds trade at discounts?

April 26, 2017closed-end discounts funds Trade

0

Posted

Why do closed-end funds trade at discounts?

1 Answer

0

Posted

The market price at which investors buy and sell closed-end funds is determined by supply and demand in the secondary market. The net asset value represents the value of the underlying assets of the portfolio. Because market prices fluctuate based on investor sentiment, a closed-end fund may trade above (at a premium) or below (at a discount) the net asset value. Other factors, in addition to investor sentiment, that may impact the premium or discount level include performance, distributions and liquidity.