Empirical evidence from the UK market is brought to bear on recent theories of closed-endfund discounts. Market pricing of skill, relative to the fees charged for it, accounts for asignificant portion of discount variation, but cannot explain the rarity of index funds orwhy they trade at a...

The CAPM can explain closed-end fund (CEF) discounts as a consequence of the higherbetas on CEF shares than on their underlying portfolios. The difference in betas is muchgreater for international funds and for bond funds than for domestic equity funds. CEFshares carry both more idiosyncratic...

In open-end funds, net inflows are positively correlated with past performance. This study investigates how past net asset value (NAV) returns affect the premium on closed-end funds traded in the United States and the United Kingdom. Past performance is significantly priced in stock funds,...