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AFFILIATED AGENTS, BOARDS OF DIRECTORS, AND MUTUAL FUND SECURITIES LENDING RETURNS
Author(s) -
Adams John C.,
Mansi Sattar A.,
Nishikawa Takeshi
Publication year - 2014
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12043
Subject(s) - mutual fund , business , closed end fund , independence (probability theory) , expense ratio , open end fund , accounting , fund of funds , finance , institutional investor , corporate governance , statistics , mathematics , market liquidity
Using a manually collected U.S. index mutual fund sample, we find that funds with sponsor‐affiliated lending agents have lower annual returns on lent securities and that securities lending returns are significantly higher when funds administer their own lending programs. We also document that multiple board of director appointments, more director fund ownership, higher board independence, and lower excess director compensation are associated with higher lending returns. Overall, the evidence has implications for mutual fund boards as they consider lending proposals and for future regulatory actions.