Covid-19 vaccines and investment performance: Evidence from equity funds in European Union.

In this paper, we analyze the impact of the marketing authorization of EMA-approved vaccines on the returns of equity funds in the EU. Using the event study methodology, we report that the introduction of all vaccines had a positive impact on the funds' returns. Higher abnormal returns were associated with the earlier vaccines, indicating the first-mover advantage and the abnormal returns were persistent across several event windows. The findings imply that equity markets welcomed the vaccine administration as an important pharmaceutical intervention to support the quasi-revival of business activities. Consequently, there was a significant uplift in the economic bottom line.

Communities and regularities in the behavior of investment fund managers.

We analyze a large microlevel dataset on the full daily portfolio holdings and exposures of 22 complex investment funds to shed light on the behavior of professional investment fund managers. We introduce a set of quantitative attributes that capture essential distinctive features of manager allocation strategies and behaviors. These characteristics include turnover, attitude toward hedging, portfolio concentration, and reaction to external events, such as changes in market conditions and flows of funds. We find the existence and stability of three main investment attitude profiles: conservative, reactive, and proactive. The conservative profile shows low turnover and resilience against external shocks; the reactive one is more prone to respond to market condition changes; and members of the proactive profile frequently adjust their portfolio allocations, but their behavior is less affected by market conditions. We find that exogenous shocks temporarily alter this configuration, but communities return to their original state once these external shocks have been absorbed and their effects vanish.

The impact of carbon neutrality on the investment performance: Evidence from the equity mutual funds in BRICS.

The promotion of carbon-neutral investments is among the primary constituents of developing a carbon-neutral economy. This is even more important for emerging economies that have constrained financial markets. In this paper, using monthly data between 2011 and 2019, we study 6519 actively managed mutual funds in BRICS after sorting them into black, brown, and green categories based on their investment holdings. Our comparative performance shows that green funds outperform their counterparts for the entire sample and within-country assessment. We also document the volatility and market timing ability of green funds, mainly absent in high emission funds. The results remained robust for various definitions of performance. Our findings also indicate Chinese green funds perform better than those of other countries. This is attributed to the multiple ecologically friendly economic policies that China has adopted over the years. Based on the results, we propose various interventions that could foster the adaptability of a carbon-neutral investment landscape.

Unravelling risk selection in Spanish general government employee mutual funds: evidence from cancer hospitalizations in the public health network.

Government employees in Spain are covered by public Mutual Funds that purchase a uniform basket of benefits, equal to the ones served to the general population, from private companies. Companies apply as private bidders for a fixed per capita premium hardly adjusted by age. Our hypothesis is that this premium does not cover risks, and companies have incentives for risk selection, which are more visible in high-cost patients. We focus on a particularly costly disease, cancer, whose prevalence is similar among government employees and the general population. We compare hospitalisations in the public hospitals of the government employees that have chosen public provision and the general population. We analysed a database of hospital discharges in the Valencian Community from 2010 to 2015 (3 million episodes). Using exact matching and logistic models, we find significant risk selection; thus, in hospitalised government employees, the likelihood for a solid metastatic carcinoma and non-metastatic cancer to appear in the registry is 31% higher than in the general population. Lymphoma shows the highest odds ratio of 2.64. We found quantitatively important effects. This research provides indirect evidence of risk selection within Spanish Mutual Funds for government employees, prompting action to reduce incentives for such a practice. More research is needed to figure out if what we have observed with cancer patients occurs in other conditions.

How the Closure of a U.S. Tax Loophole May Affect Investor Portfolios.

In the United States, exchange-traded funds can defer capital gains taxes of their investors by taking advantage of a legal loophole. To quantify the impact of this tax loophole on investor portfolios, we study a rank-dependent expected utility model. We develop an approximation formula for the sensitivity of the optimal investment strategy with respect to changes in the expected asset returns. By applying this approximation formula, we are able to quantitatively estimate how much investor portfolios may change depending on the investment horizon if the tax loophole is closed.

Sustainable mutual fund performance and flow in the recent years through the COVID-19 pandemic.

Sustainable investing has gained significant momentum over the past few years. In this paper, we study the performance and flows of sustainable equity mutual funds in recent years through the COVID-19 pandemic. We find that the high-sustainable funds perform better than the low-sustainable ones by between 1.32% and 6.96% annually. This outperformance significantly increases during the COVID-19 pandemic-induced market crash and the post-crash pandemic. Similarly, we find that high-sustainable funds attract significantly more investments (or suffer less outflow) than the low-sustainable funds by between 5.28% and 5.76% per annum. These flow differences increase considerably during the market crash, consistent with the 'flight-to-quality' effect. We also find that the high-sustainable funds attract significantly more investment during the post-crash pandemic than before the crash. This suggests that investors consider sustainable investing a necessity (not a luxury good), and their taste/attitude towards sustainable investing has changed - now they prioritize 'investing with a conscience.'

Effect of corporate social responsibility performance on dividend pay-out: Role of corporate governance quality.

The goal of this study was to analyze the influence of corporate social responsibility on dividend pay-out while considering the role of corporate governance quality on mutual funds operating in Pakistan. This study used a two-step system generalized method of moments (GMM) to control not only endogeneity problems caused by inclusion of firm-specific variables, but also the endogeneity caused by dividend pay-out selection. The findings are that mutual funds that engage in higher levels of corporate social responsibility pay greater dividends. The quality of corporate governance not only has a strong positive impact on mutual fund's dividend pay-outs, but also moderates the association between dividend pay-out and corporate social responsibility. Furthermore, differences exist between socially responsible Islamic and conventional mutual funds in terms of dividend pay-out policy. These findings imply that the quality of corporate governance performs a substantial role in dividend decisions. Policymakers and regulators should also encourage asset management firms to improve corporate governance quality and engage in more socially responsible activities, which can lead to improved fund performance and dividend pay-out.

An update of the Worldwide Integrated Assessment (WIA) on systemic insecticides. Part 3: alternatives to systemic insecticides.

Over-reliance on pesticides for pest control is inflicting serious damage to the environmental services that underpin agricultural productivity. The widespread use of systemic insecticides, neonicotinoids, and the phenylpyrazole fipronil in particular is assessed here in terms of their actual use in pest management, effects on crop yields, and the development of pest resistance to these compounds in many crops after two decades of usage. Resistance can only be overcome in the longterm by implementing methods that are not exclusively based on synthetic pesticides. A diverse range of pest management tactics is already available, all of which can achieve efficient pest control below the economic injury level while maintaining the productivity of the crops. A novel insurance method against crop failure is shown here as an example of alternative methods that can protect farmer's crops and their livelihoods without having to use insecticides. Finally, some concluding remarks about the need for a new framework for a truly sustainable agriculture that relies mainly on natural ecosystem services instead of chemicals are included; this reinforcing the previous WIA conclusions (van der Sluijs et al. Environ Sci Pollut Res 22:148-154, 2015).