The Mutual Fund—An Institutional Investor that Acts Like an Individual

Abstract

We examine changes in the average mutual fund's investments following the Jobs and Growth Tax Relief Reconciliation Act of 2003 ͑JGTRR͒. The JGTRR decreased the tax penalty on dividend and capital gains income. We hypothesize that mutual fund managers will respond to the investment preferences of the underlying shareholders and increase their ownership of dividend-paying firms. We present evidence supporting the hypothesis that mutual fund managers increased their ownership of dividend-paying firms following the JGTRR. However, we do not find evidence that the investment managers of other institutional investors increased their ownership of dividend-paying firms following the JGTRR. These results indicate that mutual funds are influenced by the tax preferences of their underlying investors, form tax clienteles, and exhibit different investment policies when compared to other types of institutional investors.

Potenciais efeitos dos dividendos na composição e na performace de fundos de ações no Brasil

“…Mesmo diante de divergências em estudos anteriores, a maioria define características do fundo tais como risco, tamanho, momento e idade FRENCH, 1993;CARHART, M., 1997;INDRO et al, 1999;CHEN et al, 2004;EVANS, 2008;GIL-BAZO;RUIZ-VERDÚ, 2009;GALLAGHER et al, 2014) como explicativas para os resultados dos investidores institucionais. Não menos importantes, outros fatores são apontados como preferências fiscais (USREY et al, 2011), dividendos (BAJAJ;VIJH, 1990;DENG et al, 2015), gestão do fundo (DING; WERMERS, 2012), influências geográficas (YANG et al, 2006;ABINZANO et al, 2010) e turbulências econômicas (LAI;LAU, 2010;CHEN et al, 2015;EL-MASRY et al, 2015).…”