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Do closed-end fund investors herd?


  • Cui, Yueting
  • Gebka, Bartosz
  • Kallinterakis, Vasileios


We provide the first investigation of herding among closed-end fund investors, drawing on the US closed-end fund market for the 1992–2016 period. Results suggest closed-end fund investors herd significantly, with their herding being mainly driven by non-fundamentals. Closed-end fund herding rises in economic/market uncertainty, with its significance being mainly concentrated in the post-2007 period. Herding among closed-end funds is strongly motivated by discounts, is more pronounced than that among their net asset values and tends to grow inversely with fund-size. The fact that closed-end fund herding is noise-driven and linked to their discounts raises the possibility that it is related to the noise trader risk attributed to closed-end funds by investor sentiment theory.

Suggested Citation

  • Cui, Yueting & Gebka, Bartosz & Kallinterakis, Vasileios, 2019. "Do closed-end fund investors herd?," Journal of Banking & Finance, Elsevier, vol. 105(C), pages 194-206.
  • Handle: RePEc:eee:jbfina:v:105:y:2019:i:c:p:194-206
    DOI: 10.1016/j.jbankfin.2019.05.015

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    More about this item


    Closed-end funds; Herding; Discounts; Sentiment;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G4 - Financial Economics - - Behavioral Finance


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