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. / text

Thesis (Ph. D.)--University of Texas at Austin, 2008. / Vita. Includes bibliographical references.

Thesis (MS)--Montana State University--Bozeman, 2009. / Typescript. Chairperson, Graduate Committee: James R. Brown. Includes bibliographical references (leaves 42-45).

Thesis (M.B.A.)--University of Hong Kong, 1990.

Thesis (Ph. D.)--University of Texas at Austin, 2006 / Vita. Includes bibliographical references.

Traditional banking theory has always viewed banks as financial intermediaries. Technological developments and regulatory changes have given rise to different types of non-bank financial intermediaries. Researchers have made claims about banks losing importance due to the emergence of non-bank financial intermediaries. As a non-bank financial intermediary, money market mutual funds have experienced phenomenal growth in Europe and the United States over the years. This growth has also been evident in South Africa in the past ten years. Several researchers have investigated the alleged disintermediation of banks’ traditional deposit taking in favour of investment management activities like managed funds. These researchers have found different levels of existence of such disintermediation in the different countries wherein the research was conducted. None of the research known to the author has provided empirical evidence of or refuted the allegation that the traditional deposit taking role of banks is declining and that money market mutual funds are substitutes for banks’ deposits. Moreover, such research has not been conducted in South Africa. Using banks’ deposits data and the net assets of money market mutual funds reported at the South African Reserve Bank, this thesis uses regression techniques to provide evidence for the substitutability of banks’ deposits by money market mutual funds. This substitution exists more in long-term deposit and short-term deposit products. The regression models derived in this thesis are found to be stable enough to be used for forecasting total bank deposits. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

Changes in quarterly holdings of Domestic General Equity unit trust funds in JSE sectors displayed a negative association with same quarter returns. The results were obtained from cross tabulations of unit trust sector holdings data taken from the period June 2002 to June 2009. The relationship was consistent with loss aversion behaviour: a tendency to hold stocks with negative returns to avoid realising a loss, and to sell stocks with positive returns to achieve a more immediate gain. This finding at the sector level of unit trust holdings was a reversal of the positive correlation between changes in holdings and stock returns observed in US mutual funds by Sias, Starks and Titman (2006). Those sectors purchased by Domestic General Equity unit trusts in the preceding quarter generated significant positive abnormal returns over the following quarter. Trading rules, which replicated the weighted purchasing of sectors by unit trusts, were tested for holding periods of between one and four quarters. The trading rule with a single quarter holding period, generated an estimated cumulative return 43% greater than a benchmark of equal sector weightings from September 2002 to June 2009; but the high level of transaction costs associated with an average annual portfolio turnover ratio of 3.0 made it impossible to achieve such a return in practice. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

This dissertation consists of two chapters. First chapter examines whether herding by actively managed equity funds affects their performance. For this purpose, first the effect of herding on stock returns is reexamined and evidence is found that, during the herding quarter, stocks bought intensely by herds outperform stocks sold intensely by herds. Controlling for subsequent quarter herding, this performance difference reverses, an indication that herding drives prices away from their fundamental values. It is also shown that herding funds benefit from this activity during the quarter in which they herd. The evidence is provided that herded stocks positively contribute to the herding funds' trade portfolio returns in the following quarter, but no association is found between the extent to which funds herd and their holding-based and subsequent quarter net returns. Introducing the concept of leader and follower funds this study shows that the subsequent quarter performance of funds that lead the herd is superior to that of follower funds. However, because leader and follower funds do not strongly retain their status overtime, they exhibit similar long-run performances. Second chapter examines whether mutual funds herd in industries and the extent to which such herding impacts industry valuations and fund performance. Using two herding measures proposed by Lakonishok, Shleifer, and Vishny (1992) and Sias (2004) it is documented that mutual funds herd in industries beyond what would be expected by chance. It is shown that industry herding is not driven by investor flows and that it is not a manifestation of individual stock herding. The evidence suggests that, during the herding quarter(s), industries that experience strong buy herding by mutual funds outperform industries that experience strong sell herding. Industries that are subjected to strong herding by mutual funds exhibit no return reversals indicating that this activity does not destabilize industry values. Using a modified Grinblatt, Titman and Wermers' (1995) fund herding measure that quantifies the degree to which a fund joins the herd during a given quarter, no compelling evidence is found that industry herding affects the subsequent performance of herding funds. / Ph. D.

Mutual funds are the common name for the open-end investment companies. This is the dominant investment company today, accounting for roughly 90% of investment comply assets. Assets under management in the mutual fund industry in United States surpassed $ 12.068 trillion by the end of April 2008 . Mutual funds performance is one of the most frequently studied topics in investment area in most countries. The reason for this popularity is availability of data and the importance of mutual funds as vehicles for investment in stock market for both individual and institutions. Since mutual funds have become popular the research has also started to include the ways of finding the right mutual funds. Although the price shares and the income from them may go down as well as up but choosing the right mutual funds can have considerable effects on investors ending wealth. The thesis examines the past performance of mutual funds as a criterion for investors' future choices. In particular, it examines if mutual funds which invested in the Swedish stock market. Swedish funds assets have passed the trillion kronor mark in March 2005, and it is rapidly increasing. We started our analysis by the funds attributes influenced the returns. In our study hypotheses are the fund characteristics i.e. popularity growth cost and management variables are included. These attributes are most frequently used by finance academies to simple and multiple regression analysis is used to test these hypotheses. We do not find any strong evidence that the past performance is a guide to future performance. As most of the results studies, our results may be subject to survivorship bias, because we have included only 33 funds in our sample during the last eight years 2000-2007. Mostly data is collected from Morningstar Sweden, the Swedish Investment fund association and secondary data from some of the mutual funds annual reports .We analyze the data for last eight years from 2000-01-01 to 2007-12-31 and the funds which are invested mostly in Swedish securities. Before and during our thesis different research studies and financial articles were studied relevant to our research thesis. Our research study results shows that the attributes which have some impact on mutual funds returns are risk, fund size, age, fund turnover and management tenure. The results indicate that the hypothesized relationship between mutual funds performance and the explanatory variables are generally upheld. The study provides a comprehensive examination of recent Swedish mutual funds performance by analyzing the funds returns and funds attributes affecting the funds performance and an effort to link performance to funds specific characteristics.

Thesis (Ph. D.)--University of Sydney, 2002. / Title from title screen (viewed 16 April 2008). Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy to the Discipline of Finance, School of Business, Faculty of Economics and Business. Includes bibliographical references. Also available in print form.