Anchored Owners, Drifting Discounts: Investor Sentiment in Swedish Closed-End Funds

Sammanfattning

Using a monthly panel of 18 Swedish closed-end funds from 2017 to 2025, we test whether investor sentiment predicts NAV discount changes in a concentratedownership setting. We construct a market-based sentiment index and find that high sentiment is followed by discount widening two to three months later, although this time-series relation weakens under checks for common monthly shocks and sentiment persistence. The pattern is stronger among funds with greater unlisted portfolio exposure, whose portfolios are harder for outside investors to replicate. By contrast, the ownership test does not support a simple retail-investor channel: funds with a larger non-retail shareholder base are not less sensitive to sentiment. The evidence suggests that sentiment-related discount dynamics can arise outside retailconcentrated closed-end fund settings, especially where arbitrage is more limited.