The sensitivity of individual and institutional investors' expectations to changing market conditions: Evidence from closed-end funds

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

This study investigates whether individual and institutional investors respond differently to changes in market conditions. Closed-end funds are the medium used to test the hypothesis because closed-end fund shares (held primarily by individual investors) and the underlying assets (held primarily by institutional investors) are claims to the same stream of distributions. The empirical results suggest that individual investors are more responsive than institutional investors to changes in market conditions. Moreover, although the response of institutional investors differs across stock and bond markets, we cannot reject the hypothesis that the additional sensitivity of individual investors' expectations is uniform across stock and bond markets.

Original languageEnglish (US)
Pages (from-to)245-269
Number of pages25
JournalReview of Quantitative Finance and Accounting
Volume8
Issue number3
DOIs
StatePublished - Jan 1 1997
Externally publishedYes

Keywords

  • Closed-end funds
  • Individual investors
  • Institutional investors

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting(all)
  • Finance

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