Performance Persistence of US Closed-End Funds

This article examines the performance persistence of 603 closed-end funds over the period January 2010 to January 2020. We used a sample free of survivorship bias and measure performance using risk adjusted measures. Ten out of the twenty three categories showed high values of the Treynor, Sharpe and information ratio. This is an indication of a skillful manager that added value in terms of better performance persistence of the funds under each category in the long-run. In contrast, thirteen out of the twenty three categories displayed low values of the Treynor, Sharpe and information ratio. This is an indication of a manager that showed low performance and no value in terms of stock picking ability. The findings are interesting to both practitioners and investors in terms of distinguishing luck from skill stock picking ability and added value in terms of performance persistence in the log-run. I addition, investors could compare between high and low values of the Treynor, Sharpe and information ratio and decide which category to choose for potential investment