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Price Performance Following Share-Repurchase Announcements by Closed-End Funds


  • We thank three anonymous reviewers and Cynthia J. Campbell (the editor) for their guidance. We are grateful to participants in the research seminars where earlier versions were presented for their comments and to the Moyer Endowment, University of Akron, Sogang University and Florida Atlantic University for support of this research. The authors are solely responsible for the contents of this paper.

* Corresponding author: College of Business Administration, Sogang University, 1 Shinsu-dong, Mapo-gu, Seoul, 121-742, Korea; Phone: +82-2-705-8861; Fax: +82-2-705-8519; E-mail:


We investigate the price performance of closed-end funds that announce share-repurchase programs. Closed-end funds experience positive average stock-price reactions to the announcements. The long-run buy-and-hold abnormal returns of repurchasing funds over the subsequent three years are significantly higher than a nonrepurchasing control sample matched by size, type, investment style and geographic diversification. Funds with larger discounts, international funds, equity funds, and funds that announce larger repurchases or frequently announce repurchases, experience more positive stock-price reactions. Except for larger repurchases, the same characteristics are associated with more positive long-run buy-and-hold returns.