Fund management fees: the role of industry competition and investor sentiment

Este artigo analisa a influência da concorrência da indústria e do sentimento do investidor sobre a probabilidade de alteração nas taxas de administração dos fundos de investimento no Brasil. Devido à grande variedade de fundos existentes, com características e objetivos diversos, pode haver diferenças significativas nas taxas observadas. Assim, é importante analisar os fatores que influenciam os valores das taxas de administração dos fundos, já que a literatura destaca que a cobrança de taxas é relacionada ao desempenho dos fundos. Além disso, observa‑se que a indústria de fundos brasileira, apesar de ter um grande número de fundos disponíveis, ainda se concentra em poucas administradoras, o que é um indicativo de que existe um baixo nível de concorrência. Em termos práticos, a investigação pode ser útil a investidores no processo de seleção dos fundos, uma vez que a taxa de administração representa um dos principais custos ao qual um investidor se depara ao investir nessa indústria. Os resultados apontam a importância da adoção de maior transparência na divulgação das taxas, por parte das instituições financeiras, uma vez que há indicações de que os valores cobrados são influenciados pelas características dos fundos e dos investidores. A metodologia adotada envolve modelos de regressão Logit/Probit, que tiveram as alterações da taxa de administração como variável explicada e, como variáveis explicativas, as proxies da concorrência e do sentimento do investidor, além de outras variáveis de controle. Observou‑se que a proxy de sentimento do investidor foi significativa para explicar a probabilidade de alteração das taxas de administração, principalmente para fixação de taxas mais elevadas. Porém, não foi observada significância estatística para a concorrência da indústria. Esta pesquisa inova ao analisar o papel da concorrência da indústria e do sentimento do investidor sobre a probabilidade de alteração das taxas de administração, contribuindo para preencher um gap encontrado na literatura nacional.This article analyzes the influence of industry competition and investor sentiment on the likelihood of change in investment fund management fees in Brazil. Due to the wide variety of existing funds, with various characteristics and objectives, there may be significant differences in the fees observed. Thus, it is worth analyzing the factors that influence the amount of fund management fees charged, since the literature highlights that the payment of fees is related to fund performance. Also, it is observed that the Brazilian fund industry, despite having a large number of available funds, is still concentrated in few management firms, which is an indication that there is a low competition level. In practical terms, this investigation may be useful to investors in the fund selection process, since the management fee represents one of the main costs an investor faces when investing in this industry. The results point out the importance of adopting greater transparency in the disclosure of fees by financial institutions, since there are indications that the amounts charged are influenced by the characteristics of funds and investors. The methodology adopted involves Logit/Probit regression models, which had changes in the management fee as an explained variable and, as explanatory variables, the proxies of competition and investor sentiment, in addition to other control variables. It was observed that the investor sentiment proxy was significant in explaining the probability of change in management fees, mainly for setting higher fees. However, no statistical significance was observed for industry competition. This research innovates by analyzing the role of industry competition and investor sentiment on the probability of changing management fees, thus contributing to fill a gap found in the Brazilian national literature

Reflexões do Impacto da Corrupção no Desenvolvimento Econômico: Uma Revisão na Economia Brasileira

The corruption is a phenomenon present in different degrees in all countries around the world. In this revision article the objective was to identify the theoretical explanations of corruption and their consequences on the economic development. First, it is verified the difficulty of measurement given its illegal and secret nature. The causes can be multiple, but the literature reveals the inexistence of a solid theoretical approach. However, behavioral models and the principal-agent relationship approaches stand out in economics and political science. There is no doubt in associating the corruption to the lower economic development, that results as a consequence of the introduction of inefficiencies on investments fall in the potential product and increases the interest rate. These characteristics seem to coincide with the reality observed during the actual millennium in the Brazilian economy; without misunderstanding it results in a pernicious combination and generating of social inequalities

INFLUENCE OF INVESTORS’ MONITORING ON EQUITY MUTUAL FUNDS’ PERFORMANCE

This paper analyzes the effect of investor monitoring on the performance of equity investment funds. For that purpose, we analyze the relationship between fund performance, measured using four-factor Alpha, and a set of control variables and monitoring proxy variables. We used monthly data for 1.317 funds, from January 2005 to April 2015. We organized the sample data into two subsamples, retail and institutional funds, to compare the performance of those funds whose clienteles presents, in principle, different monitoring capacities. Institutional funds presented superior performance compared to retail funds measured by net annual return as well as by four-factor Alpha. The variables investment, measured as the minimum initial investment requirement, and type of manager were statistically significant in the retail funds sample. The results show that greater capacity to monitor fund manager behavior could diminish the occurrence of activities against investor’s interests, which is one of the main contributions of this research

Corporate governance and release of annual financial statements

This research seeks to discover if there is any relationship between the delay in the publication of the annual financial statements of companies, and their level of corporate governance, assuming that the delay on its liberation would indicate a smaller transparency of the company. For that, proxy variables for corporate governance were defined, as well as for other dimensions of the company that can, potentially, explain that discrepancy. Ordinary Least Square and Tobit models were used. The results indicate, among other things, that the excess of control by controller shareholders tends to cause a larger delay in the liberation of the statements, but the presence of the company in BOVESPA's differentiated corporate governance levels, as well as the Index for Corporate Governance Quality do not have relationship with the delay.Transparency; Financial Statements; Corporate Governance

WHAT HAS THE COVID-19 PANDEMIC TAUGHT US ABOUT ADOPTING PREVENTIVE MEASURES?

Objective: to analyze the COVID-19 pandemic and what we have (re)learned from the world experience of adopting prevention measures recommended by the World Health Organization as well as the epidemiological overview in the world, in Latin America and in Brazil. Results: the World Health Organization has pointed out that the path to reduce the speed of circulation of the virus, control and decrease in the number of cases and deaths resulting from this pandemic can only be accomplished with mass adoption of fundamental measures that include hand hygiene, alcohol gel use, cough etiquette, cleaning surfaces, avoiding agglomerations and social distancing. The epidemiological curve of the disease clearly shows the devastating proportions in Italy, Spain and the United States, surpassing China in death records, due to the delay in adopting the aforementioned measures. In Brazil, the rapid progression in relation to the world and Latin America points to an important increase in the number of cases. Conclusion: this is possibly the most serious pandemic in recent human history, and its course can be influenced by the rigor in adopting individual and collective behavioral measures

Assimetria de Informações e Pagamento de Dividendos na Bovespa

The aim of this research was to evaluate the effect of the asymmetric information, the agency costs, and the property structure in the determination of the dividend payments, in a sample of 178 open companies quoted at Bovespa. The analyzed period was between 2000 and 2004. The Tobit regression model was used in order to handle the fact that the payout is censured at zero. It was verified that companies with ADRs quoted at NYSE, a proxy for smaller asymmetric information, pay less dividends, which is in line with the signaling hypothesis. After controlling by asymmetric information, the property concentration by the controller (insider) presented a negative relationship with the dividends payment. Lastly, it was found a negative relationship of the dividend payments with opportunities of growth and positive with the cash flow, as foreseen by the pecking order hypothesis

Assimetria de Informações e Pagamento de Dividendos na Bovespa

The aim of this research was to evaluate the effect of the asymmetric information, the agency costs, and the property structure in the determination of the dividend payments, in a sample of 178 open companies quoted at Bovespa. The analyzed period was between 2000 and 2004. The Tobit regression model was used in order to handle the fact that the payout is censured at zero. It was verified that companies with ADRs quoted at NYSE, a proxy for smaller asymmetric information, pay less dividends, which is in line with the signaling hypothesis. After controlling by asymmetric information, the property concentration by the controller (insider) presented a negative relationship with the dividends payment. Lastly, it was found a negative relationship of the dividend payments with opportunities of growth and positive with the cash flow, as foreseen by the pecking order hypothesis

Assimetria de Informações e Pagamento de Dividendos na Bovespa

The aim of this research was to evaluate the effect of the asymmetric information, the agency costs, and the property structure in the determination of the dividend payments, in a sample of 178 open companies quoted at Bovespa. The analyzed period was between 2000 and 2004. The Tobit regression model was used in order to handle the fact that the payout is censured at zero. It was verified that companies with ADRs quoted at NYSE, a proxy for smaller asymmetric information, pay less dividends, which is in line with the signaling hypothesis. After controlling by asymmetric information, the property concentration by the controller (insider) presented a negative relationship with the dividends payment. Lastly, it was found a negative relationship of the dividend payments with opportunities of growth and positive with the cash flow, as foreseen by the pecking order hypothesis

Assimetria de Informações e Pagamento de Proventos na Bovespa

In this research it is evaluated the effect of the asymmetric information, the agency costs and the property structure in the determination of the dividend payments. The Tobit regression model was used for censured data, giving consistence to the estimates with the payout index truncated at zero. They were considered the statements of 178 open companies quoted at Bovespa, in the period of 2000-2004. It was verified that the probability of dividend payments increases with the growth possibilities, the size, the cash flow, the decrease of the company’s debt and the adhesion of the company to the governance levels. Companies with ADRs at NYSE, or with smaller asymmetric information, pay smaller dividends, what is in line with the signaling hypothesis. It was verified a negative relationship of the dividend payments with the growth opportunities and positive with the cash flow, as foreseen by the pecking order hypothesis. Lastly, after controlling by asymmetric information, the property concentration for the controller (insider) presented a negative relationship with the dividends policy

Assimetria de Informações e Pagamento de Proventos na Bovespa

In this research it is evaluated the effect of the asymmetric information, the agency costs and the property structure in the determination of the dividend payments. The Tobit regression model was used for censured data, giving consistence to the estimates with the payout index truncated at zero. They were considered the statements of 178 open companies quoted at Bovespa, in the period of 2000-2004. It was verified that the probability of dividend payments increases with the growth possibilities, the size, the cash flow, the decrease of the company’s debt and the adhesion of the company to the governance levels. Companies with ADRs at NYSE, or with smaller asymmetric information, pay smaller dividends, what is in line with the signaling hypothesis. It was verified a negative relationship of the dividend payments with the growth opportunities and positive with the cash flow, as foreseen by the pecking order hypothesis. Lastly, after controlling by asymmetric information, the property concentration for the controller (insider) presented a negative relationship with the dividends policy