Abstract
We examine if a floating net asset value (NAV) increases the transparency of risk for investors. Using closed-income fixed income funds we find little evidence that a floating NAV helps investors better understand the value and risk of a fund when a fund's assets trade infrequently. This potentially informs the debate regarding the adoption of a floating NAV in the money market industry. Our results suggest that it is unlikely that the benefits of floating NAV will outweigh the costs.
| Original language | English |
|---|---|
| Pages (from-to) | 69-82 |
| Number of pages | 14 |
| Journal | The Financial Review |
| Volume | 51 |
| Issue number | 1 |
| DOIs | |
| State | Published - 1 Feb 2016 |
Keywords
- Closed-end funds
- Fixed income funds
- Floating NAV
- Money market funds
- G10
- G18
EGS Disciplines
- Finance and Financial Management
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