The Institutional Investor Impact on Stock Prices

Elaine Borges, Roy Martelanc

Abstract


Purpose – This study aims to analyze the impact of mutual funds trading shares together for consecutive periods in the price of these shares.

 

Design/methodology/approach – Fixed-effects panel regression analyzes were performed to identify the relationship between persistence, which measures how many consecutive periods a particular share was bought or sold by the pool of funds, and the returns of the same stock in the short and medium term.

 

Findings –Shares that are purchased by the pool of funds persistently have reduced returns, and stocks sold have increased returns in both the short and medium term. In addition, the sample that gathered small funds with active strategy, buying and selling small caps, presented the most statistical and economic relevance in all periods.

 

Originality/value – These results allow us to question the ability of small fund managers to select assets and the timing of their transactions, as well as their contribution as well-informed investors to the equilibrium of capital market prices.


Keywords


investment funds; institutional investor; persistence, herd effect; stocks; stock price



DOI: https://doi.org/10.7819/rbgn.v21i2.3978

Article Metrics

Metrics Loading ...

Metrics powered by PLOS ALM


 
Av. da Liberdade, 532 - São Paulo - SP Brasil Cep. 01502-001 Tel. 55 11 3272-2340
 The RBGN adopts the Creative Commons licens CC-BY Creative Commons Attribution 4.0 

The RBGN has the financial support from Fundação Escola de Comércio Álvares Penteado - FECAP and development agencies Conselho Nacional de Desenvolvimento Científico e Tecnológico - CNPq and Coordenação de Aperfeiçoamento de Pessoal de Nível Superior – CAPES.

Desenvolvido por:

Logomarca da Lepidus Tecnologia