Management fees: Determinants and influence of legal limits. Evidence from Spanish pension funds

Alda, Mercedes; Agudo, Luis Ferruz

doi:10.4067/s0718-52862013000200003

Cited by 1 publication

(1 citation statement)

References 27 publications

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“…Large funds and large management companies could attract investors who invest small amounts of money (Shu et al, 2002) possibly due to being less sensitive to the high fees charged by large funds (Alda and Ferruz, 2013) and preferring well-known funds or management companies that imply lower information and search costs due to investors being more familiar with their brand names (Huang et al, 2007). However, in the pension fund industry, investors who accumulate large amounts of assets could become beneficiaries and therefore their funds might receive monetary outflows, which does not happen in the mutual fund industry.…”

Section: Institutional Background and Development Of Hypothesesmentioning

confidence: 99%

Investor reactions to socially responsible investment

Martí-Ballester

2015

Management Decision

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Purpose – The purpose of this paper is to analyze investor reactions to ethical screening by pension plan managers. Design/methodology/approach – The author presents a sample consisting of data corresponding to 573 pension plans in relation to such aspects as financial performance, inception date, asset size, number of participants, custodial and management fees, and whether their managers adopt ethical screening or give part of their profits to social projects. On this data the author implements the fixed effects panel data model proposed by Vogelsang (2012). Findings – The results obtained indicate that investors/consumers prefer traditional or solidarity pension plans to ethical pension plans. Furthermore, the findings show that ethical investors/consumers are more (less) sensitive to positive (negative) lagged returns than caring and traditional consumers, causing traditional consumers to contribute to pension plans that they already own. Research limitations/implications – The author does not know what types of environmental, social and corporate governance criteria have been adopted by ethical pension plan managers and the weight given to each of these criteria for selecting the stock of the firms in their portfolios that could influence in the investors’ behaviour. Practical implications – The results obtained in the current paper show that investors invest less money in ethical pension plans than in traditional and solidarity pension plans; this could be due to the lack of information for their part. To solve this, management companies could increase the transparency about their corporate social responsibility (CSR) investments to encourage investors to invest in ethical products so these lead to raising CSR standards in companies, and therefore, sustainable development. Social implications – The Spanish socially responsible investment retail market is still at an early phase of development, and regulators should promote it in order to encourage firms to adopt business activities that take into account societal concerns. Originality/value – This paper provides new evidence in a field little analysed. This paper contributes to the existing literature by focusing on examining the behaviour of pension funds investors whose investment time horizon is in the long-term while previous literature focus on analysing behaviour of mutual fund investors whose investment time horizon is in the short/medium term what could cause different investors’ behaviour.

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Section: Institutional Background and Development Of Hypothesesmentioning

confidence: 99%