The Underperformance of Young Closed-End Funds in Greece

Dimitrios Kousenidis () and Christos Negakis
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Christos Negakis: University of Macedonia, Greece

Multinational Finance Journal, 2013, vol. 17, issue 1-2, 107-148

Abstract: In the present paper we study the performance of young closed-end funds (CEFs) in Greece. Using monthly CEF data from 1997 to 2007, we provide evidence showing that young funds underperform both old funds and the market. As in Kaplan and Schoar (2005), we note that new underperforming funds occur more frequently during hot market periods, potentially due to the presence of uninformed investors. The entrance of the newly raised funds in the market dilutes the overall industry performance and motivates financial institutions to take over fairly-performing subsidiary funds. As a result, well-performing funds are gradually delisted from the market and eventually only poor-performing funds survive. In this context the takeover activities prevail as a rational explanation for the underperformance and the shrinking of the closed-end fund industry in Greece

Keywords: Closed-end funds; young fund underperformance; models of portfolio performance; ATHEX (search for similar items in EconPapers)
JEL-codes: G12 G20 G23 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:mfj:journl:v:17:y:2013:i:1-2:p:107-148

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