Closed-end investment companies for the most part normally sell at a discount from asset value. These discounts vary and in some time periods are quite substantial. Such a discount pattern contrasts with mutual funds which sell at asset value plus a sales commission, ranging in many cases from 6% to 8%. This article contends that where a closed-end investment company has a satisfactory performance record there is no mathematical or logical rationale for such a discount characteristic. The discounts are primarily the result of a lack of sales effort and public understanding.
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