Open-end mutual funds and capital-gains taxes

Article Abstract:

A framework shows that the maximum overhang of unrealized profits in a fund's portfolio have a positive relationship to its expected growth rate. However, it has a negative relationship with the volatility of the growth rate. When capital gains are not realized regularly, it results to an increase in the present value of new investors' tax liabilities. The model also shows that new investors may invest in funds that have a smaller overhang of unrealized gains despite the fact the current shareholders may choose that the gains be deferred for the longest possible time.

Open-End Investment Funds, Management investment, open-end, Mutual Funds (Open End), Economic aspects, Capital gains tax, Open end mutual funds

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Private benefits from block ownership and discounts on closed-end funds

Article Abstract:

Block ownership can confer a large variety of private benefits which means that blockholders are able to elect not to open a fund in order to gain a discount. The greater the proportion of stock controlled by management, the bigger discounts will be on closed-end funds, but the existence of private benefits gives blockholder more options. Private benefits can be pecuniary, such as a salary or commission paid to the blockholder, or they can be nonpecuniary, such as a closed-end fund bearing the name of the blockholder's family.

Analysis, Study and teaching, Block trading

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Closed-end fund premia and returns: implications for financial market equilibrium

Article Abstract:

The relationship between closed end fund premia and their rate of return is discussed.

United States, Other Financial Vehicles, Mutual Funds (Closed End), Statistical Data Included, Finance, Mutual fund industry, Closed end mutual funds

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