Title

How Informative Is Floating NAV When Securities Trade Infrequently?

Document Type

Article

Language

eng

Publication Date

2-2016

Publisher

Wiley

Source Publication

The Financial Review

Source ISSN

0732-8516

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.

Comments

The Financial Review, Vol. 51, No. 1 (February 2016): 69-82. DOI. © 2016 The Eastern Finance Association. Used with permission.

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