Ch.5 · SID, SAI and KIM Documents · medium
Why do close-ended mutual fund units often trade at a discount to NAV on stock exchanges?
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EXPLANATION
Close-ended fund units often trade at a discount to NAV on stock exchanges because there is limited secondary market liquidity and buyer interest. Sellers wanting to exit before maturity must accept prices below NAV to attract buyers. This discount widens when investor sentiment is negative or the scheme is performing poorly.
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