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Author: Johan Sulaeman
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
Although investors' preference for nearby investments has been widely documented in the literature, there is no apparent consensus on whether local investors have any informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence consistent with a perception in the mutual fund industry that local funds have an informational advantage. However, the portfolio of mutual funds' local holdings do not display significant superior performance relative to the portfolio of their distant holdings. Using a parsimonious model, I hypothesize that the profitability of local informational advantage will be low due to price impact when there is a relatively large population of local agents who trade on similar private information. Consistent with this hypothesis, I find that funds do earn superior returns on local stocks for which the aggregate local capital is limited and hence the price impact of local trades is likely to be small. Overall, the results suggest that although local investors have some informational advantage, this local advantage does not lead to superior abnormal performance by local managers because of the price impact of their trading.
Author: Johan Sulaeman
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
Although investors' preference for nearby investments has been widely documented in the literature, there is no apparent consensus on whether local investors have any informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence consistent with a perception in the mutual fund industry that local funds have an informational advantage. However, the portfolio of mutual funds' local holdings do not display significant superior performance relative to the portfolio of their distant holdings. Using a parsimonious model, I hypothesize that the profitability of local informational advantage will be low due to price impact when there is a relatively large population of local agents who trade on similar private information. Consistent with this hypothesis, I find that funds do earn superior returns on local stocks for which the aggregate local capital is limited and hence the price impact of local trades is likely to be small. Overall, the results suggest that although local investors have some informational advantage, this local advantage does not lead to superior abnormal performance by local managers because of the price impact of their trading.
Author: Mariassunta Giannetti
Publisher:
ISBN:
Category :
Languages : en
Pages : 56
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Book Description
We exploit the domestic portfolios of US mutual funds to provide microeconomic evidence that investors are more likely to liquidate geographically remote investments at times of high aggregate market volatility. This has important implications for asset prices. The valuations of stocks with ex ante less local ownership decline more when aggregate market volatility is high. Furthermore, the returns of stocks with geographically distant owners are more exposed to changes in aggregate market volatility.
Author: Itzhak Venezia
Publisher: World Scientific Publishing Company
ISBN: 9789813100084
Category : Business & Economics
Languages : en
Pages : 374
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Book Description
"This unique volume presents new original research exploring factors that lead to investors behavioral biases. It discusses how features such as professionalism, sophistication, gender, media, and culture influence investors' decision-making in general, and in particular, how they generate (or limit) behavioral and cognitive biases. The effects of these factors on capital markets are also discussed. The book is based on the discussions and presentations at the First Israel Behavioral Finance Conference, which took place in Tel Aviv in May 2015. It examines in greater detail some of the key issues discussed at the conference. This is an innovative book in behavioral finance: it is the first to present an extensive collection of papers which discuss a comprehensive array of factors that influence or define investor character and analyzes these factors' effects on financial markets. The book is useful for readers interested in understanding the factors that influence investors' profiles and thus their behavioral biases. The book will be of great interest to researchers and students seeking a reference book which contains timely research on these areas of behavioral finance."--Publisher's website
Author: Natalie Oh
Publisher:
ISBN:
Category :
Languages : en
Pages : 61
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Book Description
We examine whether actively managed equity mutual funds trade on localised information events - syndicated loan covenant violations and changes in bank loan and entity ratings. Local investors achieve positive abnormal stock returns only around covenant violation periods rather than changes in credit ratings. Local investors appear to adjust their holdings at least three months prior to covenant violations. Mutual funds' holdings of local stocks and stocks affected by covenant violations predict higher performance. Finally, to identify the possible information channel utilized by local investors, we find that local investors learn from insiders' previous trades but not from their connection with syndicated loan network. Overall, our findings suggest that local investors have information advantages over distant counterparts due to their geography proximity to affected firms around credit events.
Author: Douglas J. Cumming
Publisher: Academic Press
ISBN: 0128146389
Category : Business & Economics
Languages : en
Pages : 507
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Book Description
Crowdfunding: Fundamental Cases, Facts, and Insights presents fundamental knowledge about a maturing economic field. Assembling and arranging datasets, case analyses, and other foundational materials on subjects associated with crowdfunding, it systematically, comprehensively, and authoritatively provides access to a consistent body of crowdfunding research. With the crowdfunding industry now consolidated, this core reference can serve as the basis for research projects and applied work. Acclaim for Crowdfunding"This book provides insightful cases and statistics from around the world on how rewards and equity crowdfunding markets work. It also includes useful information on marketplace lending. It is a great resource for entrepreneurs and investors, as well as for policymakers, academics, and students."– Craig Asano, Founder and CEO, National Crowdfunding and Fintech Association "Crowdfunding offers detailed analyses of rewards and equity crowdfunding markets using statistical methods and case studies. I recommend it for academics, practitioners, and policymakers who seek a rigorous look at crowdfunding markets around the world."– Jay Ritter, Joseph B. Cordell Eminent Scholar Chair, Warrington College of Business, University of Florida Presents a complete scope of crowdfunding areas in the international landscape Combines economics with international business, management, law and finance Enables practitioners and researchers to compare regulatory frameworks, best practices and market opportunities Includes a freely available website of supplementary pedagogical material
Author: Jasmine Xiao
Publisher: International Monetary Fund
ISBN: 1484388895
Category : Business & Economics
Languages : en
Pages : 33
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Book Description
This paper utilizes a new dataset of foreign and domestic mutual funds in Mexico to assess their behavior and obtains three new findings. First, foreign mutual funds are more sensitive to global financial conditions and engage more in herding and positive feedback trading than domestic mutual funds, notably during episodes of market stress. Second, the behavior of foreign funds differs substantially across types of funds: bond funds are more sensitive to global factors and engage more in positive feedback trading than equity funds; funds sold to retail investors, open-end funds, small funds, and regional funds also appear to be less stable sources of capital flows. Third, there is indicative evidence that foreign funds’ trading behavior is associated with higher local market volatilities, notably in periods of market stress; however, domestic mutual fund investors played some mitigating role.
Author: Gilles Hilary
Publisher: Edward Elgar Publishing
ISBN: 1802204172
Category : Business & Economics
Languages : en
Pages : 463
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Book Description
This accessible Handbook provides an essential entry point for those with an interest in the increasingly complex subject of financial decision making. It sheds light on new paradigms in society and the ways that new tools from private actors have affected financial decision making. Covering a broad range of key topics in the area, leading researchers summarize the state-of-the-art in their respective areas of expertise, delineating their projections for the future.
Author: OECD
Publisher: OECD Publishing
ISBN: 9264852395
Category :
Languages : en
Pages : 94
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Book Description
This edition of the OECD Sovereign Borrowing Outlook reviews developments in response to the COVID-19 pandemic for government borrowing needs, funding conditions and funding strategies in the OECD area.
Author: David A. Rakowski
Publisher:
ISBN:
Category :
Languages : en
Pages : 31
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Book Description
We use the geographically-constrained holdings of single-state municipal-bond mutual funds in order to compare the performance of local and non-local mutual fund managers. In general, we find that local managers display worse performance and significantly different risk profiles than non-local fund managers. Despite their lower returns overall, locally-managed muni bond funds display a relative advantage in markets that are financially illiquid, spatially compact, and with more population. Overall, locally-managed muni bond funds may survive in a competitive market for investment management because they provide a product that is relatively low-cost, more financially stable, and with distinct benefits in certain regional markets.
Author: Johan Arifin Sulaeman
Publisher:
ISBN:
Category : Institutional investors
Languages : en
Pages : 240
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Book Description
In this dissertation, I explore the determinants and implications of the preferences of institutional investors. First, I examine whether institutional investors' preference for local investments is related to informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence consistent with the mutual fund industry having a perception that local funds have an informational advantage. However, the portfolio of mutual funds' local holdings does not display significant superior performance relative to the portfolio of their distant holdings. Using a parsimonious model, I hypothesize that the profitability of local informational advantage will be low due to the price impact of trading when there is a relatively large population of local agents who trade on similar private information. Consistent with this hypothesis, I find that funds do earn superior returns on local stocks for which local capital is limited and hence the price impact of local trades is likely to be small. Second, I examine the preferences of institutional investors for firm policies and the relationship between these preferences and firm decisions. I find that institutional investors exhibit systematic differences in their preferences for financial and investment policies. Furthermore, these preferences are related to subsequent changes in the financial and investment policies of the firms they invest. In particular, a firm is more likely to decrease (increase) its leverage ratio if its current leverage is higher (lower) than the preferences of its institutional shareholders. A firm is also more likely to increase (decrease) its investment if its current investment ratio is lower (higher) than the preferences of its institutional shareholders. These findings suggest that the preferences of institutional shareholders are important determinants of corporate policies.
