Notable Works
In addition to several books, he has also written influential articles, including "The Valuation of Closed-End Investment Company Shares," Journal of Finance (1977). This article discussed the puzzle of why closed-end fund companies typically trade at market valuations lower than the net value of their assets. If net asset value and market capitalization are only two ways of measuring the same thing, then why is there a consistent difference between them?
Malkiel discussed, and discarded, the hypothesis that the discount is due to the management fees. The argument of the paper is that since management fees are generally constant, this view would not explain changes in the size of the discount during the life-cycle of a fund. Furthermore, if the discount resulted from management fees, it should be related (Malkiel contended) to interest rates, yet the data does not support any such tie.
On July 22, 2005, Malkiel retired from 28 years of service as a director of the Vanguard Group and trustee of Vanguard Mutual funds, yet remains closely affiliated with Vanguard due to Vanguard's similar investment philosophies. In A Random Walk Down Wall Street, he frequently references Vanguard.
Malkiel recently co-authored a book on, and has spoken extensively about, investment opportunities in China. He is currently Chief Investment Officer of AlphaShares Investments, "an investment management firm dedicated to providing investors with strategies and products that allow them to participate in China’s economic boom." AlphaShares has licensed indices to Claymore Securities as the basis for two China oriented index exchange traded funds (ETF's). Malkiel is a strong believer that, despite the uncertainties surrounding China (rural unrest, overinvestment/bubbles, non-democratic government) China is a viable source of investment opportunities.
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