The opening of investment funds in the CR

This paper describes the process of unitisation of investment trusts and closed-end funds in the Czech Republic. The investment trusts were created in 1991 and 1992 as part of the Czech privatization process as the only means of collective investing. Using daily data from July 1991 to April 2000, this paper analyses the price reactions to important events, which occurred in this period. The price reaction was expected in three instances: (i) during the institutional change on the market formation of Securities Commission, (ii) during the change of related legislation, and (iii) once public announcements of opening investment funds were made. The authors report that apart from the shortest measurement intervals there were abnormal returns during the period of institutional and legislation changes. There were also statistically significant abnormal returns connected with the actual opening of these funds. However, the authors warn that the results should be interpreted with caution due to small sample of funds under investigation.