Browsing by Subject "Institutional investors"
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Item Open Access Institutional investment horizon, herding, and stock returns(Bilkent University, 2020-12) Iqbal, Muhammad SabeehThis thesis investigates the interaction between the herding behavior of institutions classified by their investment horizons and the role of investment horizon of institutions in driving the book-to-market effect. First, we examine the price impact of the herding behavior of short- and long-horizon institutional investors. We categorize the institutional herding as same-side herding when both types of institutions herd on the buy-side or sell-side together and as opposite-side herding when short-horizon institutions buy while the long-horizon institutions sell or vice versa. We find that the previously documented destabilizing impact of long-horizon institutional herding is only observed on opposite-side herding. Moreover, short-horizon institutional herding improves the stock price discovery process confirming the belief that they are more informed. Second, we investigate the differential contribution of institutions with different investment horizons in book-to-market effect. We find that long-horizon institutions tend to buy (sell) stocks with positive (negative) past intangible information. This behavior exacerbates market overreaction and magnifies intangible return reversals and thus contributes to book-to-market effect. On the other hand, short-horizon institutions trade independent of intangible information, and their trading in the direction of intangible information does not contribute to book to market effect. Moreover, our findings also support that short-horizon institutions are better informed than long-horizon institutions.Item Open Access Other people's money: A comparison of institutional investors(Elsevier, 2022-12) Eraslan, V.; Omole, John; Sensoy, Ahmet; Ozdamar, MelisaUsing unique equity ownership data, we investigate the stock picking preferences and return forecasting performances of institutional investors that manage their own money against those that manage others’. We reveal that these investors’ preferences significantly differ in historical patterns, liquidity and prudence when picking stocks. In particular, ‘own money managers’ display a risk-seeking behaviour whereas “others’ money managers” exhibit risk-averse characteristics. However, our results indicate that both types of investors are well informed, albeit own money managers excel in the short-term while others’ money managers are successful in the long-term.