Investment Performance of Individual Investors: Evidence from the Korean Stock Market

Park, Jin-Woo; Kim, Minhyuk

doi:10.2753/ree1540-496x5001s113

Cited by 9 publications

(5 citation statements)

References 34 publications

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“…Similar results for a broader group of 34 countries, which included both emerging and developed markets, were reported byThomas et al (2014), who found that pension funds as institutional investors can contribute to the reduction of stock market volatility.3 In a different study that used the data from South Korea, which is directly relevant to the literature on the trading activity of various types of investors, Park and Kim (2014) investigated equity holdings of individual investors and found that stocks with the highest proportion of individual holdings underperform stocks with the lowest proportion of individual holdings. This difference in returns was explained by individual investors' uninformed stock-picking skills resulting from the lack of attention given to, or misinterpretation of, the readily accessible firm fundamentals data Park and Kim (2014). also argue that the characteristics of stocks favoured by individual investors are associated with small capitalization, low stock price, low profitability and high turnover.Pension funds, large capital inflows and stock returns in a thin market…”

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“… 3 In a different study that used the data from South Korea, which is directly relevant to the literature on the trading activity of various types of investors, Park and Kim (2014) investigated equity holdings of individual investors and found that stocks with the highest proportion of individual holdings underperform stocks with the lowest proportion of individual holdings. This difference in returns was explained by individual investors’ uninformed stock-picking skills resulting from the lack of attention given to, or misinterpretation of, the readily accessible firm fundamentals data.…”

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confidence: 99%

“…This difference in returns was explained by individual investors’ uninformed stock-picking skills resulting from the lack of attention given to, or misinterpretation of, the readily accessible firm fundamentals data. Park and Kim (2014) also argue that the characteristics of stocks favoured by individual investors are associated with small capitalization, low stock price, low profitability and high turnover.…”

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Pension funds, large capital inflows and stock returns in a thin market

Brzeszczyński

Bohl

Serwa

2018

Journal of Pension Economics and Finance

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Using unique data about capital flows from the public social security institute ZUS (Zakład Ubezpieczeń Społecznych) to private pension funds OFEs (Otwarte Fundusze Emerytalne) in Poland, we find that their impact, as a group of large institutional investors, on stock returns is statistically significant in short-term but no such effect exists in the long-run. This result is consistent with the temporary price pressure hypothesis of Ben-Rephael et al. (2011). We analyze the capital transfers, in the form of the aggregated pension contributions collected from all employees in the entire Polish economy, from the ZUS to the private pension funds, which further invest this capital on the stock market. The average time for the subsequent reaction of stock prices is found to be 4 days. The trading strategy based on this result generates superior outcomes in comparison with the passive strategy, which further confirms the price impact of capital inflows. Our findings are not only relevant for stock market investors but they also have broader policy implications for stock market regulators and for the national pension regulators.

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Pension funds, large capital inflows and stock returns in a thin market

Brzeszczyński

Bohl

Serwa

2018

Journal of Pension Economics and Finance

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“…The system in developing economies may cause information asymmetry between individual and institutional investors due to inadequate policies for investor protection and disclosures. Individual investors in Korea have been observed to underperform due to their weak skills in stock selection (Park & Kim, 2014). Forecasting performance of fund may help investors to mitigate risks and maximize returns over the same (Gu, 2021).…”

Section: Investment Performance Vol 4 Issue 2 Issn (Online): 2790-77...mentioning

confidence: 99%

Corporate Social Responsibility Disclosures & Delegated Investment Decisions: The Role of Religiosity

Rukhshinda Begum,

Danish Ahmed Siddiqui

2024

International Journal of Social Science Entrepreneurship

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This study is intended to test the conditional effect of corporate social responsibility disclosures on the performance of investment professionals in Pakistan with the intervening effects of religiosity and decisions of investment professionals. The proposed relationship has been tested over a sample of 248 investment professionals analyzed through the application of structured equation modelling by using Smart PLS 4. The study discovered the significant mediating effects of religiosity and investment decisions in between the causal relationship of CSR disclosures and the performance of investment professionals in Pakistan. Moreover all direct effects developed in the conceptual model have been found to be significant. This means that the extent of religiosity of investment professionals affects their investment decisions being made for their clients on the basis of the CSR disclosures. The positive direction of mediation reveal that CSR disclosures of religious investment professionals positively affect their decisions and performance related to the investments they make for their clients. This is the first time, to the best of our knowledge, that both direct and indirect/conditional effects of corporate social responsibility disclosures on the performance of investment professionals have been tested in the perspective of delegated investments.

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“…Some of the recent works, for example, investment performance and investor sentiment, information content of implied volatility index, behavioral investment strategy and volatility spillover effects (e.g. Ryu, 2012;Narayan et al, 2014;Park and Kim, 2014;Taşdemir and Yalama, 2014;Uygur and Taş, 2014;Jain-Chandra and Unsal, 2014;Padhi, 2014a, b, c, 2015). But, we do not find any study in the emerging markets like India that deals with the investor's "fear" and "greed" index.…”

Section: Review Of Earlier Studiesmentioning

confidence: 99%

On the relationship between implied volatility index and equity index returns

Shaikh

Padhi

2016

Journal of Economic Studies

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Purpose – The purpose of this paper is to analyze the asymmetric contemporaneous relationship between implied volatility index (India VIX) and Equity Index (S & P CNX Nifty Index). In addition, the study also analyzes the seasonality of implied volatility index in the form of day-of-the-week effects and option expiration cycle. Design/methodology/approach – This study employs simple OLS estimation to analyze the contemporaneous relationship among the volatility index and stock index. In order to obtain robust results, the analysis has been presented for the calendar years and sub-periods. Moreover, the international evidenced presented for other Asian markets (Japan and China). Findings – The empirical evidences reveal a strong persistence of asymmetry among the India VIX and Nifty stock index, at the same time the magnitude of asymmetry is not identical. The results show that the changes in India VIX occur bigger for the negative return shocks than the positive returns shocks. The similar kinds of results are recorded for the Japan and China volatility index. Particularly, the analysis also supports that India VIX holds seasonality, on the market opening VIX observed to be at its high level, and on the subsequent days it remains low. The results on the options expiration unfold the facts that India VIX remains more normal on the day of expiration. Practical implications – The asymmetric relation and seasonal patterns are quite useful to the volatility traders to price the financial assets when market trades in the high- and low-volatility periods. Originality/value – There is a lack of studies of this kind in the context of emerging markets like India; hence, this is an attempt in this direction. The study provides an insight to the NSE to launch some derivative products (i.e. F & Os) on India VIX that can generate more liquidity in the market for the volatility traders.

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Investment Performance of Individual Investors: Evidence from the Korean Stock Market

Cited by 9 publications

References 34 publications

Pension funds, large capital inflows and stock returns in a thin market

Pension funds, large capital inflows and stock returns in a thin market

Corporate Social Responsibility Disclosures & Delegated Investment Decisions: The Role of Religiosity

On the relationship between implied volatility index and equity index returns

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