IMPACT OF CORRUPTION NEWS ON PORTFOLIO ALLOCATION AND TURNOVER OF BRAZILIAN EQUITY FUNDS
Keywords:
Equity Funds, Corruption, Turnover, Portfolio CompositionAbstract
The main purpose of this research is to analyze the effects of news related to corruption involving publicly-held companies in the portfolio allocation and turnover of the Stock Investment Funds (FIAs) in Brazil. The study used financial data from publicly traded companies and Brazilian FIAs, with the sample period ranging from January/2012 to December/2019. We tested the hypotheses through regression analysis with panel data. We identified that, on average, FIAs allocate fewer resources to companies with corruption-related news. The results also suggested that FIAs with at least one company in their portfolio with this type of news did not necessarily show a higher average turnover in their portfolio. The study innovates by addressing the relationship between institutional investors and corruption; in practice, it shows that these events impact the behavior of FIAs, and corroborates the "Sand the Wheels" perspective discussed in the study.
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