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Article
Publication date: 1 February 2002

THOMAS A. AYERS and ERIC BYRNES

This article examines the recent phenomenon of investment advisors' and mutual fund complexes' creation of alternative investment products such as private investment funds. It…

Abstract

This article examines the recent phenomenon of investment advisors' and mutual fund complexes' creation of alternative investment products such as private investment funds. It explores the reasons behind the popularity of these investment vehicles.

Details

Journal of Investment Compliance, vol. 2 no. 4
Type: Research Article
ISSN: 1528-5812

Abstract

Details

The Savvy Investor’s Guide to Pooled Investments
Type: Book
ISBN: 978-1-78973-213-9

Book part
Publication date: 27 September 2011

Narjess Boubakri, Jean-Claude Cosset and Nabil Samir

Purpose – Run a comparative analysis between investments of sovereign wealth funds (SWFs) and mutual funds, focusing on firm-level, country-level, and institutional…

Abstract

Purpose – Run a comparative analysis between investments of sovereign wealth funds (SWFs) and mutual funds, focusing on firm-level, country-level, and institutional variables.

Methodology/approach – We use a hand-collected sample of 1,845 acquisitions around the world over the last 25 years (251 for SWFs and 1,594 for mutual funds). We then run univariate parametric and nonparametric tests to assess the differences in the investments of both subsamples.

Findings – We review the literature on the determinants of SWFs' investment decisions. Our analysis adds to the scarce available literature on the investment decisions of SWFs and their comparison with other institutional investors. Our results show that, compared to mutual funds, SWFs indeed exhibit different preferences: for instance, SWFs prefer to acquire stakes in larger, less liquid companies which are financially distressed but which also have a higher level of growth opportunities. They also prefer less innovative firms with more concentrated ownership, which are located in less developed but geographically closer countries with whom they do not necessarily share cultural and religious backgrounds.

Social implications – Our results are important for practitioners and firms seeking to attract a given type of institutional investment. They also add insights to the debate on the “hidden” political objectives behind SWF investments in the Western world.

Originality/value of paper – This is the first attempt to empirically assess the differences in the investment choices of SWFs and mutual funds.

Details

Institutional Investors in Global Capital Markets
Type: Book
ISBN: 978-1-78052-243-2

Keywords

Article
Publication date: 25 August 2023

Niket Thakker, Hitesh Kalro, Mayank Joshipura and Prashant Mishra

This study examines current dynamics, consolidates current knowledge, elicits trends, identifies and analyzes primary research clusters, and offers future research directions for…

Abstract

Purpose

This study examines current dynamics, consolidates current knowledge, elicits trends, identifies and analyzes primary research clusters, and offers future research directions for mutual fund marketing.

Design/methodology/approach

Using bibliographic information from the SCOPUS database, this study used sequential bibliometric (143 documents) and content analyses (37 documents). Bibliometric analysis aids descriptive analysis and science mapping, while content analysis facilitates identifying and analyzing research clusters and provides future research directions.

Findings

The study identifies publication trends, the most relevant authors, and journal articles and unveils the knowledge structures of the field. Analysis of bibliographic coupling reveals the following significant clusters: (1) socially responsible investing and investor preferences, (2) investor factors and traits and investment decisions; (3) external factors, mutual funds' performance and proxy information; (4) the role of disclosures and ratings in shaping investment choices, and (5) cognitive biases, information processing errors and investor behavior. Finally, it offers future research directions.

Research limitations/implications

Using different databases, bibliometric analysis tools, study periods or article screening criteria for the study might yield different results. However, this study's significant findings are robust to such alternatives.

Practical implications

This study summarizes primary clusters and identifies gaps in the current literature, which helps scholars, practitioners, regulators and policymakers understand the nuances of mutual funds marketing. Future studies may focus on the role of online and offline integration, using neuroscience for data m and contemporary investment behavior models.

Originality/value

This is the first study to apply a two-stage sequential hybrid review of articles published over the last decade in high-quality journals, enabling an analysis of the depth and breadth of mutual funds marketing research.

Details

International Journal of Bank Marketing, vol. 41 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 21 March 2016

Inderjit Kaur and K.P. Kaushik

Mutual funds in India have not been as favourable investment alternatives as in developed countries, as assets under management of mutual funds to gross domestic product in India…

3794

Abstract

Purpose

Mutual funds in India have not been as favourable investment alternatives as in developed countries, as assets under management of mutual funds to gross domestic product in India have been 7-8 per cent compared to 37 per cent globally. Further, investor base of mutual funds has been narrow, as retail investors constitute 98 per cent of folios but contributed only 58 per cent of investments in September 2014. To broaden the investor base for mutual funds in India, it remains imperative to understand the determinants of investment behaviour of investors towards mutual funds. This study aims to achieve this objective.

Design/methodology/approach

Based on the theory of planned behaviour, the study examined the effect of awareness, attitude (perception for outcome) and socioeconomic conditions of an investor on his investment behaviour towards mutual funds with the logit model. The results are based on 450 valid responses from the primary survey in Delhi-NCR.

Findings

The research provided that investment behaviour could be explained with awareness, perception and socioeconomic characteristics of individual investors. Better awareness related to various aspects of mutual funds will have a positive effect on investment in mutual funds. Contrary to belief, risk perception for mutual funds had no effect on the investment decision. Further, socioeconomic characteristics such as age, gender, occupation, income and education of investors had an impact on the awareness about mutual funds.

Research limitations/implications

As the study has been confined to Delhi-NCR, it should be considered a pilot study and needs to be replicated in other states of India to have more robust results.

Practical implications

The study has implications for mutual funds and regulators. The study highlights a lack of awareness about mutual funds among particular sections of society as a reason for non-investment in mutual funds. The mutual funds and regulators need to focus on females, older age groups and middle-income groups in their efforts to improve their awareness about mutual funds. This would improve their investor base and flow of funds in mutual funds. Furthermore, the process of investment in mutual funds needs to simplified.

Originality/value

In an Indian context, this study has been the first attempt to understand the systematic relation between actual investment behaviour towards mutual funds and various determinants such as socioeconomic characteristics, awareness and attitude (perception) about mutual funds.

Details

Journal of Indian Business Research, vol. 8 no. 1
Type: Research Article
ISSN: 1755-4195

Keywords

Article
Publication date: 12 February 2020

Tim Mooney

This study examines whether mutual funds buy or sell the stock of merger targets advised by their investment bank affiliates in advance of merger announcements and withdrawals…

Abstract

Purpose

This study examines whether mutual funds buy or sell the stock of merger targets advised by their investment bank affiliates in advance of merger announcements and withdrawals. Existing literature finds mixed evidence on whether financial conglomerates act on conflicts of interest across divisions.

Design/methodology/approach

Affiliations between investment banks and mutual funds are identified, and the incidence and characteristics of mergers where funds trade the stock of targets advised by affiliates are examined.

Findings

Mutual funds buy or increase holdings of merger targets advised by their investment bank affiliate in advance of merger announcements, capturing highly positive abnormal returns. Mergers with this pre-announcement trading by affiliates are more likely to be completed successfully. Furthermore, mutual funds are more likely to liquidate holdings of a target in advance of a merger withdrawal if the fund is affiliated with the target's investment bank advisor, thus avoiding negative abnormal returns surrounding merger withdrawals. Results are robust after controlling for potential sample selection bias.

Originality/value

These findings contribute to the literature on affiliations between investment banking and mutual fund management, M&A outcomes, and to the discussion of potential conflicts of interest within banks. Also, this study is the first to examine trading activities by mutual funds affiliated with merger investment bank advisors during value-sensitive periods beyond the pre-announcement phase, such as the time period leading up to merger withdrawals.

Details

Managerial Finance, vol. 48 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

Abstract

Details

Investment Traps Exposed
Type: Book
ISBN: 978-1-78714-253-4

Article
Publication date: 1 June 2005

Bruce A. Huhmann and Nalinaksha Bhattacharyya

Finance theory proposes that consumers require information about the risk‐return trade‐off credibility information to relieve principal‐agent conflict concerns, and transaction…

4289

Abstract

Purpose

Finance theory proposes that consumers require information about the risk‐return trade‐off credibility information to relieve principal‐agent conflict concerns, and transaction cost information – for investment decisions. This paper aims to investigate whether or not such information is present in advertisements for one investment vehicle – mutual funds.

Design/methodology/approach

All advertisements in Barron's and Money over two years were content‐analysed to determine the degree to which mutual fund advertising practice adheres to theories regarding information necessary for optimal investment decisions. Use of techniques known to influence advertisement noting (i.e. advertisement size and colour) and copy readership (i.e. visual size, text length, unique selling proposition/brand‐differentiating message, celebrity endorsements, direct or indirect comparisons with competitors, and emotional appeals) was also investigated. Finally, because mutual funds are a financial service, the presence of convenience information (e.g. investment minima, access to agents or account information, and liquidity) was studied.

Findings

Mutual fund advertisements are not providing the information necessary for optimal investment decisions. Mutual funds use techniques known to increase the likelihood that their advertisements are noticed, but they also use techniques known to decrease the readership of their advertisements. Also, they rarely included convenience information.

Research limitations/implications

Mutual fund advertisements attempt the activation of the advertised brand‐quality and the long copy‐quality heuristic. However, future research must determine whether or not consumers are applying these two heuristics on seeing mutual fund advertisements.

Originality/value

Mutual fund advertising is not serving consumers. Regulators should require all mutual fund advertisements to include an easy‐to‐read table summarizing necessary investment information to assist consumer decision making.

Details

International Journal of Bank Marketing, vol. 23 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 15 October 2021

Umi Widyastuti, Erie Febrian, Sutisna Sutisna and Tettet Fitrijanti

This study aims to determine antecedents of market discipline. A model was constructed by extending the theory of planned behavior (TPB) to explore the cognitive, psychological…

1081

Abstract

Purpose

This study aims to determine antecedents of market discipline. A model was constructed by extending the theory of planned behavior (TPB) to explore the cognitive, psychological and social factors that influence the market discipline in the form of withdrawal behavior.

Design/methodology/approach

This study applied a quantitative approach by surveying 181 Indonesian retail investors in Sharia mutual funds, which were represented by civil servants. The samples were collected using the purposive sampling technique. This study used the partial least square–structural equation model to analyze the data.

Findings

The results revealed that the Islamic financial literacy, the attitudes toward withdrawal, the subjective norms and the perceived behavioral control had a positive significant effect on the withdrawal intention, whereas financial risk tolerance had an insignificant impact. Then, all the exogenous variables and intention to withdraw had a significant contribution in explaining market discipline. Contrary to the proposed hypothesis, the attitude toward withdrawal had a negative impact on market discipline. The structural model indicated that the TPB could be extended by adding some exogenous variables (i.e. Islamic financial literacy and financial risk tolerance) in determining the intention to withdraw and withdrawal behavior, which indicated the market discipline in Sharia mutual funds.

Research limitations/implications

This study was limited to individual investors who work as civil servants. This study did not accommodate different demographic factors such as age and gender, which influence fund withdrawal behavior.

Practical implications

The government must focus on the inclusion of market discipline in Sharia mutual funds’ regulation to encourage the risk management disclosure, specifically that related to Sharia compliance.

Originality/value

Previous studies applied a traditional finance theory to predict market discipline, but this study contributes to filling the theoretical gap by explaining the market discipline from a behavioral finance perspective that was found in Sharia mutual funds.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 1 August 1997

Gordon J. Alexander, Jonathan D. Jones and Peter J. Nigro

The flow of cash funds from employer‐sponsored pension plans into mutual funds has been an important driving force behind the mutual fund industry's unprecedented recent growth…

Abstract

The flow of cash funds from employer‐sponsored pension plans into mutual funds has been an important driving force behind the mutual fund industry's unprecedented recent growth. The increased attractiveness of mutual funds to pension investors is due to a shift from defined benefit to defined contribution plans, to changes in the tax laws, and to the growing recognition of certain types of mutual funds as suitable long‐term investment vehicles. Accompanying the tremendous growth in defined contribution plans, however, has been a shift in investment risk from employers to employees. Using the responses from a nationwide telephone survey of 2,000 mutual fund shareholders, this paper analyzes various characteristics and investment knowledge of purchasers of mutual funds through employer‐sponsored pension plans. The results show that overall, pension investors are as knowledgeable about the costs, risks, and returns associated with mutual funds as investors who purchase mutual funds through other distribution channels. However, when dividing the sample of pension‐plan investors into two subsamples consisting of those who purchase mutual funds solely through the pension channel and those also employing other distribution channels, pension‐channel‐only investors are found to be significantly less knowledgeable. These results suggest that there is much room for improvement in investor education for a large segment of pension‐channel investors.

Details

Managerial Finance, vol. 23 no. 8
Type: Research Article
ISSN: 0307-4358

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